Federal-Mogul Corp., dropping its four-year effort to build a global auto parts retail empire, unveiled a massive restructuring Thursday that returns it to its core manufacturing and distribution business.
The Southfield, Mich.-based company said it took a total of $264 million in pre-tax charges to cover the restructuring and special one-time items from the fourth quarter.
Federal-Mogul, which has about $2 billion in annual sales, also said it will slash about 2,900 jobs, equal to 18.5 percent of its worldwide workforce of 15,700.
The charges resulted in a net loss of $220.2 million for the fourth quarter, compared with a loss of $49.1 million for the 1995 period.
For all of 1996, the company lost $211.1 million, but would have posted a profit of $34.7 million before special items. In 1995 the company lost $9.7 million.
"We have realigned our growth strategy behind our core competencies of engineering, manufacturing and distribution," Chairman Dick Snell said in a statement. "Our retail operations are good viable businesses that can be operated better by someone else."
The company makes a wide variety of products, ranging from engine bearings, oil seals and pistons to lighting and electrical components, for the auto, farm and construction vehicle industry.
In afternoon trading, Federal Mogul stock was up $1.125 at $24.625 share on the New York Stock Exchange.
Nicholas Colas, an analyst at CS First Boston said the move was a prudent one for the company, which had no in-house retail expertise when it began to expand in that area.
"Basically, the grand vision of having an international third world distribution and retail business is gone," he said. "This is much more playing to the company's historical strengths."
Included in the restructuring is the planned sale of 132 international retail operations in Australia, Chile, Ecuador, Panama, Puerto Rico, South Africa, and Venezuela, and the planned sale or restructuring of about 30 wholesale operations in 10 countries.
The firm also plans to relocate product lines in its European manufacturing operations and cut the workforce; consolidate lighting products in Juarez, Mexico, and close a manufacturing facility in Indiana.
The company also plans to close two distribution warehouses in Kentucky, consolidate customer support functions in the United States and streamline administration and operational staff functions worldwide.
Included in that is the moving of European aftermarket management functions in Geneva, Switzerland, to manufacturing headquarters in Wiesbaden, Germany.
The moves are a complete reversal of the efforts by former Chairman and Chief Executive Officer Dennis Gormley, who was forced to resign in September after pressure from the board.
Gormley had spent about $500 million on acquisitions since 1992, although a company spokeswoman said less than one-third of that was related to the international retail expansion.
Federal-Mogul director Steve Miller took over on an interim basis until Snell was hired Nov. 8.
Snell said in a statement that there will be further restructuring. He said moves will generate positive cash flow, adding the company expects a "positive economic value-added" by 1998.
Colas said future restructuring charges will range between $5 million and $7 million in the next couple of years.
"The guiding light at this company has shifted from trying to create earnings growth to creating shareholder value," Colas said.
federal mogul corp dropping its four year effort to build a global auto parts retail empire unveiled a massive restructuring thursday that returns it to its core manufacturing and distribution business the southfield mich based company said it took a total of 264 million in pre tax charges to cover the restructuring and special one time items from the fourth quarter federal mogul which has about 2 billion in annual sales also said it will slash about 2 900 jobs equal to 18 5 percent of its worldwide workforce of 15 700 the charges resulted in a net loss of 220 2 million for the fourth quarter compared with a loss of 49 1 million for the 1995 period for all of 1996 the company lost 211 1 million but would have posted a profit of 34 7 million before special items in 1995 the company lost 9 7 million we have realigned our growth strategy behind our core competencies of engineering manufacturing and distribution chairman dick snell said in a statement our retail operations are good viable businesses that can be operated better by someone else the company makes a wide variety of products ranging from engine bearings oil seals and pistons to lighting and electrical components for the auto farm and construction vehicle industry in afternoon trading federal mogul stock was up 1 125 at 24 625 share on the new york stock exchange nicholas colas an analyst at cs first boston said the move was a prudent one for the company which had no in house retail expertise when it began to expand in that area basically the grand vision of having an international third world distribution and retail business is gone he said this is much more playing to the company s historical strengths included in the restructuring is the planned sale of 132 international retail operations in australia chile ecuador panama puerto rico south africa and venezuela and the planned sale or restructuring of about 30 wholesale operations in 10 countries the firm also plans to relocate product lines in its european manufacturing operations and cut the workforce consolidate lighting products in juarez mexico and close a manufacturing facility in indiana the company also plans to close two distribution warehouses in kentucky consolidate customer support functions in the united states and streamline administration and operational staff functions worldwide included in that is the moving of european aftermarket management functions in geneva switzerland to manufacturing headquarters in wiesbaden germany the moves are a complete reversal of the efforts by former chairman and chief executive officer dennis gormley who was forced to resign in september after pressure from the board gormley had spent about 500 million on acquisitions since 1992 although a company spokeswoman said less than one third of that was related to the international retail expansion federal mogul director steve miller took over on an interim basis until snell was hired nov 8 snell said in a statement that there will be further restructuring he said moves will generate positive cash flow adding the company expects a positive economic value added by 1998 colas said future restructuring charges will range between 5 million and 7 million in the next couple of years the guiding light at this company has shifted from trying to create earnings growth to creating shareholder value colas said
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Ford Motor Co. Wednesday threatened to halt production at three plants in Michigan and Ohio if Johnson Controls Inc. and the United Auto Workers did not work out a solution to a nine-day strike.
Ford's action would idle about 6,800 hourly workers and suspend production of two of its best-selling and most profitable vehicles, the Expedition full-size sport utility and F-Series pickup trucks.
Ford spokeswoman Francine Romine-MacBride said the automaker told UAW locals Wednesday afternoon if an agreement was not reached by Thursday, production would stop at the end of the regular afternoon shift that day.
Plants that would be affected are in Wayne, Mich., Lorain, Ohio, and Avon Lake, Ohio.
About 500 UAW workers at two Johnson Controls plants walked off the job on Jan. 28 when talks broke down on a new contract with the Milwaukee-based company. The plants, located in Plymouth, Mich., and Oberlin, Ohio, make seats for the Expedition and Econoline and Club Wagon full-size vans.
The action marks Ford's most public and aggressive action to push the two sides toward a resolution since it refused to accept seats made by non-union replacements several hours after the strike began.
David Healy, an analyst at Burnham Securities Inc, said Ford's move could serve as a "wake-up call" for the union, but also could end up hurting the automaker's first quarter earnings. Ford makes about $10,000 before taxes on each Expedition, he said, and does not have much flexibility to recoup lost production.
"Ford is in a sense shooting itself in the foot," Healy said.
Negotiations resumed Wednesday afternoon after breaking off Tuesday, Johnson Controls spokesman Jeff Steiner said.
Thinking the strike would end quickly, Ford has been continuing to make Expeditions and Econolines with temporary seats and storing the vehicles in nearby lots. By the end of production today, the company will have about 6,800 Expeditions and 6,300 Econolines without proper seats.
Dealers had a 26-day supply of Expeditions on their lots at the end of January. The industry typically considers a 60-day supply to be ideal.
Ford officials expressed concern that Johnson Controls would have problems meeting Ford's ongoing requirements in addition to catching up to Expeditions and Econolines already made.
"We really truly believed there would be an early settlement and that's clearly not the case," Romine-MacBride said.
In additions to Expeditions, Ford makes its popular F-Series pickups at truck plant in Wayne, where 4,000 UAW members work.
The Lorain plant does final assembly of Econolines and Club Wagons. About 1,500 workers would be affected by a shutdown. Production of the Thunderbird and Cougar cars would be affected, although those lines already were idled for separate reasons.
At the Avon Lake plant, which makes frames for the commercial vans, 1,300 workers would be affected. Frame production of the Mercury Villager and Nissan Quest minivans would not be affected, Ford said.
Ford officials declined to comment on how much the strike was likely to cost Ford.
UAW spokesman Karl Mantyla declined to comment on Ford's action. Steiner at Johnson Controls said the company was aware of Ford's position and was committed to settling the strike as soon as possible.
The two sides were at odds over pay levels for a new contract. The union says it wants the same hourly rate of $14 to $16 that competitors pay. But Steiner said Johnson Controls has put forth a competitive offer.
"We feel we've got a fair and reasonable package on the table that compares favourably to what the UAW has agreed to at other supplier plants," he said.
ford motor co wednesday threatened to halt production at three plants in michigan and ohio if johnson controls inc and the united auto workers did not work out a solution to a nine day strike ford s action would idle about 6 800 hourly workers and suspend production of two of its best selling and most profitable vehicles the expedition full size sport utility and f series pickup trucks ford spokeswoman francine romine macbride said the automaker told uaw locals wednesday afternoon if an agreement was not reached by thursday production would stop at the end of the regular afternoon shift that day plants that would be affected are in wayne mich lorain ohio and avon lake ohio about 500 uaw workers at two johnson controls plants walked off the job on jan 28 when talks broke down on a new contract with the milwaukee based company the plants located in plymouth mich and oberlin ohio make seats for the expedition and econoline and club wagon full size vans the action marks ford s most public and aggressive action to push the two sides toward a resolution since it refused to accept seats made by non union replacements several hours after the strike began david healy an analyst at burnham securities inc said ford s move could serve as a wake up call for the union but also could end up hurting the automaker s first quarter earnings ford makes about 10 000 before taxes on each expedition he said and does not have much flexibility to recoup lost production ford is in a sense shooting itself in the foot healy said negotiations resumed wednesday afternoon after breaking off tuesday johnson controls spokesman jeff steiner said thinking the strike would end quickly ford has been continuing to make expeditions and econolines with temporary seats and storing the vehicles in nearby lots by the end of production today the company will have about 6 800 expeditions and 6 300 econolines without proper seats dealers had a 26 day supply of expeditions on their lots at the end of january the industry typically considers a 60 day supply to be ideal ford officials expressed concern that johnson controls would have problems meeting ford s ongoing requirements in addition to catching up to expeditions and econolines already made we really truly believed there would be an early settlement and that s clearly not the case romine macbride said in additions to expeditions ford makes its popular f series pickups at truck plant in wayne where 4 000 uaw members work the lorain plant does final assembly of econolines and club wagons about 1 500 workers would be affected by a shutdown production of the thunderbird and cougar cars would be affected although those lines already were idled for separate reasons at the avon lake plant which makes frames for the commercial vans 1 300 workers would be affected frame production of the mercury villager and nissan quest minivans would not be affected ford said ford officials declined to comment on how much the strike was likely to cost ford uaw spokesman karl mantyla declined to comment on ford s action steiner at johnson controls said the company was aware of ford s position and was committed to settling the strike as soon as possible the two sides were at odds over pay levels for a new contract the union says it wants the same hourly rate of 14 to 16 that competitors pay but steiner said johnson controls has put forth a competitive offer we feel we ve got a fair and reasonable package on the table that compares favourably to what the uaw has agreed to at other supplier plants he said
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Federal-Mogul Corp., dropping its four-year effort to build a global auto parts retail empire, unveiled a massive restructuring Thursday that returns it to its core manufacturing and distribution business.
The Southfield, Mich.-based company said it took a total of $264 million in pre-tax charges to cover the restructuring and special one-time items from the fourth quarter.
Federal-Mogul, which has about $2 billion in annual sales, also said it will slash about 2,900 jobs, equal to 18.5 percent of its worldwide work force of 15,700.
The charges resulted in a net loss of $220.2 million for the fourth quarter, compared with a loss of $49.1 million for the 1995 period.
For all of 1996, the company lost $211.1 million, but would have posted a profit of $34.7 million before special items. In 1995 the company lost $9.7 million.
"We have realigned our growth strategy behind our core competencies of engineering, manufacturing and distribution," Chairman Dick Snell said in a statement. "Our retail operations are good viable businesses that can be operated better by someone else."
The company makes a wide variety of products, ranging from engine bearings, oil seals and pistons to lighting and electrical components, for the auto, farm and construction vehicle industry.
Federal Mogul stock closed up 87.5 cents at $24.375 on the New York Stock Exchange.
Snell, the former CEO of Tenneco Inc.'s automotive business, joined Federal-Mogul in early November. He earned high praise from analysts Thursday for his swift action and straightforward explantion of where the company is headed.
"This is the kind of stock where if the numbers work out, the stock is going to work out, because people want to like him," said Salomon Brothers analyst Darren Kimball.
Nicholas Colas, an analyst at CS First Boston, said the restructuring makes sense because the firm tried to expand in an area where it had no in-house retail expertise.
"Basically, the grand vision of having an international third world distribution and retail business is gone," he said. "This is much more playing to the company's historical strengths."
Included in the restructuring is the planned sale of 132 international retail operations in Australia, Chile, Ecuador, Panama, Puerto Rico, South Africa, and Venezuela, and the planned sale or restructuring of about 30 wholesale operations in 10 countries.
The firm also plans to relocate product lines in its European manufacturing operations and cut the work force; consolidate lighting products in Juarez, Mexico; and close a manufacturing facility in Indiana. The company also plans to close two distribution warehouses in Kentucky, consolidate customer support functions in the United States and streamline administration and operational staff functions worldwide.
The moves are a complete reversal of the efforts by former Chairman and Chief Executive Officer Dennis Gormley, who was forced to resign in September after pressure from the board.
Snell said in an interview that future restructuring in North America and Europe are likely, which could result in more job losses over the next few years, although not on the scale of Thursday's announcement.
At the same time, the firm will be on the lookout for acquisitions that could add to its core businesses, he said. For instance, since Federal-Mogul makes engine bearings, it makes sense for it also to offer pistons, Snell said.
federal mogul corp dropping its four year effort to build a global auto parts retail empire unveiled a massive restructuring thursday that returns it to its core manufacturing and distribution business the southfield mich based company said it took a total of 264 million in pre tax charges to cover the restructuring and special one time items from the fourth quarter federal mogul which has about 2 billion in annual sales also said it will slash about 2 900 jobs equal to 18 5 percent of its worldwide work force of 15 700 the charges resulted in a net loss of 220 2 million for the fourth quarter compared with a loss of 49 1 million for the 1995 period for all of 1996 the company lost 211 1 million but would have posted a profit of 34 7 million before special items in 1995 the company lost 9 7 million we have realigned our growth strategy behind our core competencies of engineering manufacturing and distribution chairman dick snell said in a statement our retail operations are good viable businesses that can be operated better by someone else the company makes a wide variety of products ranging from engine bearings oil seals and pistons to lighting and electrical components for the auto farm and construction vehicle industry federal mogul stock closed up 87 5 cents at 24 375 on the new york stock exchange snell the former ceo of tenneco inc s automotive business joined federal mogul in early november he earned high praise from analysts thursday for his swift action and straightforward explantion of where the company is headed this is the kind of stock where if the numbers work out the stock is going to work out because people want to like him said salomon brothers analyst darren kimball nicholas colas an analyst at cs first boston said the restructuring makes sense because the firm tried to expand in an area where it had no in house retail expertise basically the grand vision of having an international third world distribution and retail business is gone he said this is much more playing to the company s historical strengths included in the restructuring is the planned sale of 132 international retail operations in australia chile ecuador panama puerto rico south africa and venezuela and the planned sale or restructuring of about 30 wholesale operations in 10 countries the firm also plans to relocate product lines in its european manufacturing operations and cut the work force consolidate lighting products in juarez mexico and close a manufacturing facility in indiana the company also plans to close two distribution warehouses in kentucky consolidate customer support functions in the united states and streamline administration and operational staff functions worldwide the moves are a complete reversal of the efforts by former chairman and chief executive officer dennis gormley who was forced to resign in september after pressure from the board snell said in an interview that future restructuring in north america and europe are likely which could result in more job losses over the next few years although not on the scale of thursday s announcement at the same time the firm will be on the lookout for acquisitions that could add to its core businesses he said for instance since federal mogul makes engine bearings it makes sense for it also to offer pistons snell said
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When thousands of auto dealers rolled into Las Vegas for their annual convention last year, there was much clamour over the looming onslaught of no-haggle superstores.
As dealers prepare for this year's gathering, which starts Saturday in Atlanta, the juggernaught is upon them.
Republic Industries Inc., the company controlled by billionaire investor Wayne Huizenga of Blockbuster Video fame, is on a buying spree that may have already made it the largest auto dealer group in the nation.
Within two months, Republic, which includes the AutoNation USA superstore chain, has gone from owning no new-car franchises to six dealer groups.
In the meantime, officials at CarMax, the auto superstore chain owned by Circuit City Stores Inc., said earlier this month they would consider buying existing dealerships and adding more new-car outlets as part of their expansion plans.
"I think it's got a lot of dealers rattled," said John Sinclair, owner of Sinclair Ford of Festus in Festus, Mo.
The sweeping changes prompted industry trade magazine Automotive News to ask in its most recent edition: "Apocalpyse Now?"
Before its latest purchase, Montgomery Securities estimated Republic's 1997 franchised dealership revenues at $2.5 billion. That puts it ahead of the previous largest group, Hendrick Automotive Group, which has estimated 1997 revenues of $2.4 billion.
The explosive growth of Republic, CarMax and others comes as Detroit's Big Three automakers have backed off their traditional resistance to publicly owned dealerships.
Ford Motor Co. Chairman Alex Trotman told dealers in Las Vegas a year ago that the No. 2 automaker had no plans to follow Chrysler Corp. and award a new car franchise to an auto superstore.
But the automaker reversed its position in December when it formed an alliance with Republic that resulted in the sale of Ohio-based Mullinax Management, one of the country's biggest Ford dealers, to Republic.
Ford Chief Financial Officer John Devine said earlier this week the automaker still believes the private enterprise system is the best for the industry.
But he added, "We also have to recognise that changes are here and more changes are going to come."
How profitable and successful the superstores ultimately become remains to be seen. But in the short term, they are helping turn the tradition-bound retail car industry upside down. Armed with capital, the auto superstores have taken sophisticated mass-market retail concepts honed in such places as consumer electronics stores and applied them to the new and used vehicle market.
The results are huge lots of high-quality, pre-certified used cars. Buyers who dread walking into an old-fashioned car dealerships enter the new superstores to find user-friendly computer kiosks and childrens' play areas. Salaried sales representatives offer low-pressure help, vehicles at no-haggle prices and 30-day bumper-to-bumper warranties.
"I think there's going to be a revolution in the car business," Fred Ricart, owner of Ricart Ford in Columbus, Ohio, said earlier this month during a panel discussion at the Automotive News World Congress.
Ricart, whose own dealership is structured in an auto mall format, believes traditional dealers can overcome their negative sterotypes and compete. But he says they have to find new ways of improving and measuring customer loyalty and satisfaction.
"The advantage the superstores have is they've got a clean slate going in," he said.
The National Automobile Dealers Association's 80th Annual Convention and Equipment Exposition will be held at the Georgia World Congress in Atlanta, from Feb. 1-4.
when thousands of auto dealers rolled into las vegas for their annual convention last year there was much clamour over the looming onslaught of no haggle superstores as dealers prepare for this year s gathering which starts saturday in atlanta the juggernaught is upon them republic industries inc the company controlled by billionaire investor wayne huizenga of blockbuster video fame is on a buying spree that may have already made it the largest auto dealer group in the nation within two months republic which includes the autonation usa superstore chain has gone from owning no new car franchises to six dealer groups in the meantime officials at carmax the auto superstore chain owned by circuit city stores inc said earlier this month they would consider buying existing dealerships and adding more new car outlets as part of their expansion plans i think it s got a lot of dealers rattled said john sinclair owner of sinclair ford of festus in festus mo the sweeping changes prompted industry trade magazine automotive news to ask in its most recent edition apocalpyse now before its latest purchase montgomery securities estimated republic s 1997 franchised dealership revenues at 2 5 billion that puts it ahead of the previous largest group hendrick automotive group which has estimated 1997 revenues of 2 4 billion the explosive growth of republic carmax and others comes as detroit s big three automakers have backed off their traditional resistance to publicly owned dealerships ford motor co chairman alex trotman told dealers in las vegas a year ago that the no 2 automaker had no plans to follow chrysler corp and award a new car franchise to an auto superstore but the automaker reversed its position in december when it formed an alliance with republic that resulted in the sale of ohio based mullinax management one of the country s biggest ford dealers to republic ford chief financial officer john devine said earlier this week the automaker still believes the private enterprise system is the best for the industry but he added we also have to recognise that changes are here and more changes are going to come how profitable and successful the superstores ultimately become remains to be seen but in the short term they are helping turn the tradition bound retail car industry upside down armed with capital the auto superstores have taken sophisticated mass market retail concepts honed in such places as consumer electronics stores and applied them to the new and used vehicle market the results are huge lots of high quality pre certified used cars buyers who dread walking into an old fashioned car dealerships enter the new superstores to find user friendly computer kiosks and childrens play areas salaried sales representatives offer low pressure help vehicles at no haggle prices and 30 day bumper to bumper warranties i think there s going to be a revolution in the car business fred ricart owner of ricart ford in columbus ohio said earlier this month during a panel discussion at the automotive news world congress ricart whose own dealership is structured in an auto mall format believes traditional dealers can overcome their negative sterotypes and compete but he says they have to find new ways of improving and measuring customer loyalty and satisfaction the advantage the superstores have is they ve got a clean slate going in he said the national automobile dealers association s 80th annual convention and equipment exposition will be held at the georgia world congress in atlanta from feb 1 4
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General Motors Corp. said Tuesday its fourth quarter earnings fell by more than half as labour strife in the second half of the year cost it $700 million in profits.
The world's largest automaker earned $786 million, or 92 cents a share, in the fourth quarter, down from $1.59 billion, or $1.95 a share, in the 1995 fourth quarter. All figures exclude results from Electronic Data Systems Corp., which was spun off last June.
Revenues fell to $40.95 billion from $41.35 billion.
For all of 1996, GM earned $4.95 billion, or $6.06 a share, down from $6.03 billion, or $7.14 a share. Revenues for the year rose to $164.1 billion from $160.3 billion.
Workers from the United Auto Workers union and Canadian Auto Workers union struck GM last fall after talks broke down on a new three-year contract. In March 1996, a UAW strike at two Dayton, Ohio, brake plants crippled GM's North American production for more than two weeks.
All told, GM said work stoppages in the United States and Canada reduced its full-year earnings by $1.2 billion on an after-tax basis.
"Clearly our 1996 fourth-quarter and calendar-year results were impacted by the strike-related production losses in the United States and Canada and are not indicative of GM's potential for continued profit improvement," GM Chairman John Smith said.
The strikes also took a bite out of the 1996 profit sharing checks for GM's union workers. GM said 282,000 represented workers in the United States will receive about $300 each -- less than half of the $800 each received last year.
GM said 76,000 eligible salaried workers will receive 1996 incentive payments, with payments rising with the level of pay and responsibility. By comparison, Chrysler Corp. announced last week its U.S. workers will each receive an average of $7,900 in profit sharing.
GM's 1996 fourth quarter results included several one-time accounting items, including a $157 million loss on the sale of four Delphi parts plants to Peregrine Inc. and a $167 million charge for lump sum payments to UAW members as part of its new labour contract.
Including the strike-related effects, the one-time items brought down GM's fourth quarter earnings by $762 million, or 99 cents a share. However, the fourth quarter also included a separate, favourable tax gain of $262 million.
GM's North American operations, its core automotive group in the United States, had a net loss of $124 million vs. a profit of $603 million in the year-ago quarter. For the year, the North American unit, which includes Delphi Automotive Systems, earned $1.2 billion, down from $2.4 billion.
The automaker's international operations reported net income of $353 million for the quarter, down from $498 million a year ago. For all of 1996, GM's international profits were $1.5 billion, down from $1.6 billion in 1995.
Worldwide car and truck deliveries from GM dealers for the quarter were 1.9 million units vs. 2.02 million a year earlier. That reduced the automaker's worldwide market share to 15.5 percent for the quarter from 17.3 percent.
GM's U.S. market share also fell, to 30.2 percent in the fourth quarter from 33.5 percent a year ago. Unit deliveries in the United States were 1.08 million down from 1.20 million.
In his statement, Smith also blamed the lower 1996 results on production changeovers, higher advertising and "consumer-influence" expenses related to new-product launches. The average U.S. retail incentive for the fourth quarter was $739 a vehicle, up from $518.
"We have more new cars and trucks going into the market now than any time in the last 15 years," he said. "In fact, about 20 percent of the 1997 production will be for the new models launched in 1996. Those new cars and trucks are key to our plans to aggressively increase market share in the United States this year."
GM stock was down $1 at $60.875 in afternoon trading on the New York Stock Exchange.
general motors corp said tuesday its fourth quarter earnings fell by more than half as labour strife in the second half of the year cost it 700 million in profits the world s largest automaker earned 786 million or 92 cents a share in the fourth quarter down from 1 59 billion or 1 95 a share in the 1995 fourth quarter all figures exclude results from electronic data systems corp which was spun off last june revenues fell to 40 95 billion from 41 35 billion for all of 1996 gm earned 4 95 billion or 6 06 a share down from 6 03 billion or 7 14 a share revenues for the year rose to 164 1 billion from 160 3 billion workers from the united auto workers union and canadian auto workers union struck gm last fall after talks broke down on a new three year contract in march 1996 a uaw strike at two dayton ohio brake plants crippled gm s north american production for more than two weeks all told gm said work stoppages in the united states and canada reduced its full year earnings by 1 2 billion on an after tax basis clearly our 1996 fourth quarter and calendar year results were impacted by the strike related production losses in the united states and canada and are not indicative of gm s potential for continued profit improvement gm chairman john smith said the strikes also took a bite out of the 1996 profit sharing checks for gm s union workers gm said 282 000 represented workers in the united states will receive about 300 each less than half of the 800 each received last year gm said 76 000 eligible salaried workers will receive 1996 incentive payments with payments rising with the level of pay and responsibility by comparison chrysler corp announced last week its u s workers will each receive an average of 7 900 in profit sharing gm s 1996 fourth quarter results included several one time accounting items including a 157 million loss on the sale of four delphi parts plants to peregrine inc and a 167 million charge for lump sum payments to uaw members as part of its new labour contract including the strike related effects the one time items brought down gm s fourth quarter earnings by 762 million or 99 cents a share however the fourth quarter also included a separate favourable tax gain of 262 million gm s north american operations its core automotive group in the united states had a net loss of 124 million vs a profit of 603 million in the year ago quarter for the year the north american unit which includes delphi automotive systems earned 1 2 billion down from 2 4 billion the automaker s international operations reported net income of 353 million for the quarter down from 498 million a year ago for all of 1996 gm s international profits were 1 5 billion down from 1 6 billion in 1995 worldwide car and truck deliveries from gm dealers for the quarter were 1 9 million units vs 2 02 million a year earlier that reduced the automaker s worldwide market share to 15 5 percent for the quarter from 17 3 percent gm s u s market share also fell to 30 2 percent in the fourth quarter from 33 5 percent a year ago unit deliveries in the united states were 1 08 million down from 1 20 million in his statement smith also blamed the lower 1996 results on production changeovers higher advertising and consumer influence expenses related to new product launches the average u s retail incentive for the fourth quarter was 739 a vehicle up from 518 we have more new cars and trucks going into the market now than any time in the last 15 years he said in fact about 20 percent of the 1997 production will be for the new models launched in 1996 those new cars and trucks are key to our plans to aggressively increase market share in the united states this year gm stock was down 1 at 60 875 in afternoon trading on the new york stock exchange
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Ford Motor Co. said Wednesday profits jumped 82 percent to $1.2 billion in the fourth quarter as it rebounded from product launches that held profits down a year earlier.
Ford, the last of the Big Three Detroit automakers to report fourth-quarter results, said the earnings equaled $1 a share. The results reflected a total of $132 million in special charges, including costs related to Ford's decision to cut 3,500 jobs last year.
In the 1995 quarter, Ford earned $660 million, or 49 cents a share. Sales rose to $38.8 billion from $34.6 billion.
Excluding one-time items, Ford's fourth quarter income was $1.10 a share -- higher than the $1.02 a share forecast by analysts, according to First Call, which tracks estimates.
Although Ford appears to be making headway in cost reduction, analysts were not overly impressed, noting that sales of high-profit light truck products are booming.
"They were not great, especially in view of the fact that they are selling a lot trucks," said Maryann Keller, an analyst with Furman Selz & Co.
Ford Chairman Alex Trotman said in a statement that automotive earnings will improve in 1997, because the company has successfully completed its highest-volume launches in North America and Europe.
"We're starting 1997 in a much stronger competitive position," he said.
Trotman said Ford expects better results for all of 1997 in Europe, where the company is moving to cut costs. Ford also predicted smaller losses in South America for 1997, he added.
"Overall, we are on track," he said.
Meantime, Ford Chief Financial Officer John Devine told reporters that cost-cutting will reach new heights in 1997. For the first time, Ford expects 1997 costs to be below those of the prior year.
The fourth quarter results capped a mixed year for the automaker in which strong profits from its Financial Services Group were needed to offset a steady flow of red ink from overseas operations.
Earnings for all of 1996 rose 7 percent to $4.4 billion, or $3.65 a share, from $4.1 billion, or $3.34 in 1995. Ford's worldwide automotive operations posted net income of $1.6 billion, down from $2 billion. Financial Services earned a record $2.8 billion in 1996, up 33 percent over 1995.
Revenues for the year climbed to $147.0 billion from $137.1 billion in 1995.
Ford's core U.S. automotive operations, which contribute about 65 percent of total automotive revenues, reported profits of $628 million for the fourth quarter, compared with $168 million a year ago.
Ford continued to have problems overseas, but there were signs of progress in turning those operations around. Ford's European loss for the quarter rose to $88 million from $48 million. But excluding $127 million in severance charges in the 1996 quarter, the operating results showed a $39 million profit, versus a $26 million operating profit last year.
In South America, where Ford has struggled in the Brazilian market, the fourth quarter net loss was $287 million, compared with a $112 million loss a year ago.
"I thought the fourth quarter was an okay quarter. What was most important was improvement on the cost front," said Ronald Glantz, an analyst at Dean Witter Reynolds.
On Tuesday, General Motors Corp. said strike costs slashed fourth quarter earnings by 50 percent to $786 million. Chrysler Corp. last week said fourth quarter earnings fell to $807 million, down from $1.04 billion.
Ford's stock lost 12.5 cents to close at 32.375 on the New York Stock Exchange.
ford motor co said wednesday profits jumped 82 percent to 1 2 billion in the fourth quarter as it rebounded from product launches that held profits down a year earlier ford the last of the big three detroit automakers to report fourth quarter results said the earnings equaled 1 a share the results reflected a total of 132 million in special charges including costs related to ford s decision to cut 3 500 jobs last year in the 1995 quarter ford earned 660 million or 49 cents a share sales rose to 38 8 billion from 34 6 billion excluding one time items ford s fourth quarter income was 1 10 a share higher than the 1 02 a share forecast by analysts according to first call which tracks estimates although ford appears to be making headway in cost reduction analysts were not overly impressed noting that sales of high profit light truck products are booming they were not great especially in view of the fact that they are selling a lot trucks said maryann keller an analyst with furman selz amp co ford chairman alex trotman said in a statement that automotive earnings will improve in 1997 because the company has successfully completed its highest volume launches in north america and europe we re starting 1997 in a much stronger competitive position he said trotman said ford expects better results for all of 1997 in europe where the company is moving to cut costs ford also predicted smaller losses in south america for 1997 he added overall we are on track he said meantime ford chief financial officer john devine told reporters that cost cutting will reach new heights in 1997 for the first time ford expects 1997 costs to be below those of the prior year the fourth quarter results capped a mixed year for the automaker in which strong profits from its financial services group were needed to offset a steady flow of red ink from overseas operations earnings for all of 1996 rose 7 percent to 4 4 billion or 3 65 a share from 4 1 billion or 3 34 in 1995 ford s worldwide automotive operations posted net income of 1 6 billion down from 2 billion financial services earned a record 2 8 billion in 1996 up 33 percent over 1995 revenues for the year climbed to 147 0 billion from 137 1 billion in 1995 ford s core u s automotive operations which contribute about 65 percent of total automotive revenues reported profits of 628 million for the fourth quarter compared with 168 million a year ago ford continued to have problems overseas but there were signs of progress in turning those operations around ford s european loss for the quarter rose to 88 million from 48 million but excluding 127 million in severance charges in the 1996 quarter the operating results showed a 39 million profit versus a 26 million operating profit last year in south america where ford has struggled in the brazilian market the fourth quarter net loss was 287 million compared with a 112 million loss a year ago i thought the fourth quarter was an okay quarter what was most important was improvement on the cost front said ronald glantz an analyst at dean witter reynolds on tuesday general motors corp said strike costs slashed fourth quarter earnings by 50 percent to 786 million chrysler corp last week said fourth quarter earnings fell to 807 million down from 1 04 billion ford s stock lost 12 5 cents to close at 32 375 on the new york stock exchange
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Ford Motor Co. said Wednesday that its profit jumped 82 percent to $1.2 billion in the fourth quarter as it rebounded from product launches that held profits down a year earlier.
Ford, the last of the Big Three Detroit automakers to report fourth-quarter results, said it earned $1 a share. The results included a $132 million charge for one-time items.
A year earlier, Ford earned $660 million, or 49 cents a share. For all of 1996, Ford's net income rose 7 percent to $4.45 billion, or $3.64 a share.
Fourth-quarter revenues were $38.8 billion vs. $34.6 billion. Revenues for the year climbed to $147.0 billion from $137.1 billion in 1995.
"We have successfully completed our highest-volume launches in North America and Europe," Ford Chairman and Chief Executive Officer Alex Trotman said in a statement.
"We're starting 1997 in a much stronger competitive position," he said. "We expect automotive earnings to improve in 1997."
Ford's core U.S. automotive operations, which contribute about 65 percent of total automotive revenues, reported profit of $628 million for the fourth quarter, compared with $168 million a year ago.
Ford continues to benefit from strong sales of F-Series pickup trucks, Explorer sport/utility vehicles, and its new Expedition full-size sport/utility.
About 55 percent of Ford's U.S. automotive sales in 1996 were light truck products, the segment that includes pickups, minivans and sport/utilities.
But Ford continued to have problems overseas. The company's non-U.S. automotive operations lost $238 million in the quarter, up from a loss of $152 million, due primarily to losses in Europe and South America.
Ford's European loss for the quarter rose to $88 million from $48 million a year ago. But it was less than the $472 million it lost in the third quarter.
In South America, where Ford has struggled in the Brazilian market, the fourth quarter loss was $287 million, compared with $112 million a year ago.
Trotman said Ford expects better results for all of 1997 in Europe, where the company has launched several cost-cutting moves.
He also predicted improving results for Brazil and Argentina and said Ford is expecting smaller losses in South America for all of 1997, and is targeted to break even in 1998.
"We have the right plans in Brazil and Argentina to restore our strength and profitabilty, although we know it will take some time as we introduce new products, build a new organization and restore the dealer body," he said. "Overall, we are on track."
Ford's stock lost 25 cents to $32.25 in early trading on the New York Stock Exchange.
ford motor co said wednesday that its profit jumped 82 percent to 1 2 billion in the fourth quarter as it rebounded from product launches that held profits down a year earlier ford the last of the big three detroit automakers to report fourth quarter results said it earned 1 a share the results included a 132 million charge for one time items a year earlier ford earned 660 million or 49 cents a share for all of 1996 ford s net income rose 7 percent to 4 45 billion or 3 64 a share fourth quarter revenues were 38 8 billion vs 34 6 billion revenues for the year climbed to 147 0 billion from 137 1 billion in 1995 we have successfully completed our highest volume launches in north america and europe ford chairman and chief executive officer alex trotman said in a statement we re starting 1997 in a much stronger competitive position he said we expect automotive earnings to improve in 1997 ford s core u s automotive operations which contribute about 65 percent of total automotive revenues reported profit of 628 million for the fourth quarter compared with 168 million a year ago ford continues to benefit from strong sales of f series pickup trucks explorer sport utility vehicles and its new expedition full size sport utility about 55 percent of ford s u s automotive sales in 1996 were light truck products the segment that includes pickups minivans and sport utilities but ford continued to have problems overseas the company s non u s automotive operations lost 238 million in the quarter up from a loss of 152 million due primarily to losses in europe and south america ford s european loss for the quarter rose to 88 million from 48 million a year ago but it was less than the 472 million it lost in the third quarter in south america where ford has struggled in the brazilian market the fourth quarter loss was 287 million compared with 112 million a year ago trotman said ford expects better results for all of 1997 in europe where the company has launched several cost cutting moves he also predicted improving results for brazil and argentina and said ford is expecting smaller losses in south america for all of 1997 and is targeted to break even in 1998 we have the right plans in brazil and argentina to restore our strength and profitabilty although we know it will take some time as we introduce new products build a new organization and restore the dealer body he said overall we are on track ford s stock lost 25 cents to 32 25 in early trading on the new york stock exchange
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Chrysler Corp. Tuesday reported brisk sales of minivans and pickup trucks for August, pushing total U.S. sales for the automaker up 9 percent on a daily selling basis to 186,306.
The August total broke a company record for the month of 176,184 set in 1989.
Sales of light trucks, including popular Ram pickups and four-door minivans were 127,870, a 16.7 percent jump that marked the 11th consecutive month of rising light truck sales.
Domestically produced car sales came in weaker than some analysts had expected, falling 2 percent to 58,255 units.
Chrysler's strong light truck sales were helped by incentives on some Jeep sport utility models. Grand Cherokee sales rose 42 percent; Cherokee was up 52 percent; and Wrangler sales shot up 59 percent.
Total pickup sales were held back somewhat by low supplies of the Dakota, which is undergoing a model changeover. Dealers have a 35-day supply of the compact pickups -- about half of what the industry considers to be ideal.
Chrysler executives said they did not expect significant volumes of the new Dakotas to be available until October.
Steven Torok, executive director of sales and marketing operations, said Chrysler was not concerned about the slide in car sales. Total car sales were down 4 percent from August 1995, and off 24 percent from July.
August is often a seasonally weaker month than July, Torok said. Also, declines in the Dodge Stratus and Neon were partly attributable to model-year changeovers.
"Frankly, we saw our cars starting to firm up as the month went on, and we think we'll have a pretty good month in September," said Torok, adding September car sales will likely surpass those of August.
Torok said the No. 3 automaker was pleased with the breadth of its sales performance.
"What we see is a very even, consistent demand pattern," he said. "Consumer sentiment seems to be not euphoric but consistent."
Although car sales were slightly weaker, PaineWebber analyst Michael Ward said Chrysler's total numbers were still respectable because it was up against a strong year-ago performance.
Chrysler was the only one of the major automakers to report monthly sales on Tuesday. General Motors Corp. is scheduled to report sales Wednesday. Ward predicted it will post sales that are 4 percent to 5 percent below last year, with light trucks again offsetting weak car numbers.
Also on Tuesday, Subaru of America, a unit of Fuji Heavy Industries, reported U.S. sales up 18 percent to 10,361. Volvo Cars of North America, a unit of AB Volvo had August sales of 7,349, down almost 1 percent.
chrysler corp tuesday reported brisk sales of minivans and pickup trucks for august pushing total u s sales for the automaker up 9 percent on a daily selling basis to 186 306 the august total broke a company record for the month of 176 184 set in 1989 sales of light trucks including popular ram pickups and four door minivans were 127 870 a 16 7 percent jump that marked the 11th consecutive month of rising light truck sales domestically produced car sales came in weaker than some analysts had expected falling 2 percent to 58 255 units chrysler s strong light truck sales were helped by incentives on some jeep sport utility models grand cherokee sales rose 42 percent cherokee was up 52 percent and wrangler sales shot up 59 percent total pickup sales were held back somewhat by low supplies of the dakota which is undergoing a model changeover dealers have a 35 day supply of the compact pickups about half of what the industry considers to be ideal chrysler executives said they did not expect significant volumes of the new dakotas to be available until october steven torok executive director of sales and marketing operations said chrysler was not concerned about the slide in car sales total car sales were down 4 percent from august 1995 and off 24 percent from july august is often a seasonally weaker month than july torok said also declines in the dodge stratus and neon were partly attributable to model year changeovers frankly we saw our cars starting to firm up as the month went on and we think we ll have a pretty good month in september said torok adding september car sales will likely surpass those of august torok said the no 3 automaker was pleased with the breadth of its sales performance what we see is a very even consistent demand pattern he said consumer sentiment seems to be not euphoric but consistent although car sales were slightly weaker painewebber analyst michael ward said chrysler s total numbers were still respectable because it was up against a strong year ago performance chrysler was the only one of the major automakers to report monthly sales on tuesday general motors corp is scheduled to report sales wednesday ward predicted it will post sales that are 4 percent to 5 percent below last year with light trucks again offsetting weak car numbers also on tuesday subaru of america a unit of fuji heavy industries reported u s sales up 18 percent to 10 361 volvo cars of north america a unit of ab volvo had august sales of 7 349 down almost 1 percent
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When General Motors Corp.'s former Chairman Roger Smith forked over $5.1 billion for Hughes Aircraft Co., he envisioned an industrial Goliath that would develop space-age technologies for every-day cars.
Nearly 12 years the later, the verdict is mixed on Smith's grand plan, analysts said Thursday.
Raytheon Corp.'s agreement to purchase the Hughes defence operations is valued at $9.5 billion -- more than covering the original cost of the entire company bought from the Howard Hughes Medical Institute in June 1985.
If 100 percent of the Hughes-linked GM Class H stock were valued at Thursday's closing stock price of just under $63 a share, Hughes would be worth $25.2 billion. Under the structure before the proposed sale, about 25 percent of the Class H shares were traded publicly, with the rest held by GM.
Financially, GM's purchase of Hughes has paid off handsomely for the world's largest automaker.
But from the perspective of integrating Hughes and GM products, the experiment has not panned out, some analysts say.
One attempt was a heads-up instrument display like those used on fighter jet cockpits that was incorporated into Oldsmobiles and Pontiacs -- but never went anywhere.
"The idea of synergistically combining aerospace technology into the automobile business, and applying GM's advanced mass production technology to the high-cost aerospace business, was an idea straight out of cloud cuckoo-land and it never happened," said David Healy, an analyst at Burnham Securities Inc.
"Roger Smith was a terrible manager but a great investor," Healy added.
Analysts also pointed out that when GM's industry dominance slipped in the mid-1980s, the money it tapped for Hughes was unavilable to sink into sorely needed new car and truck programmes.
Indeed, Hughes Chairman C. Michael Armstrong acknowledged Wednesday that GM does not need to own Hughes to get the benefits of its radar and other aerospace technology.
But other analysts argued that GM has reaped untold strategic benefits from Hughes that are not readily visible to outside observers. One of the first benefits GM received was a vast improvement in its systems engineering capabilities, said David Cole, director of the University of Michigan's Centre for the Study of Automotive Transportation.
GM's EV1 electric car, the industry's first electric vehicle designed from the ground up, would not have been possible without Hughes' Delco Electronics Corp. unit, which developed the inductive charging system, as well as the lead-acid batteries.
Another Hughes product appearing on GM vehicles is the OnStar navigation and security system. GM plans to offer the $895 optional system on vehicles outside its Cadillac division by the 1998 model year.
Cole said there were numerous other applications for Hughes' technology, including future electric vehicle platforms and other vehicles that incorporate hybrid technologies.
"Financially, it was excellent," said Cole. "The problem is that a lot of people outside don't see the level of integration."
when general motors corp s former chairman roger smith forked over 5 1 billion for hughes aircraft co he envisioned an industrial goliath that would develop space age technologies for every day cars nearly 12 years the later the verdict is mixed on smith s grand plan analysts said thursday raytheon corp s agreement to purchase the hughes defence operations is valued at 9 5 billion more than covering the original cost of the entire company bought from the howard hughes medical institute in june 1985 if 100 percent of the hughes linked gm class h stock were valued at thursday s closing stock price of just under 63 a share hughes would be worth 25 2 billion under the structure before the proposed sale about 25 percent of the class h shares were traded publicly with the rest held by gm financially gm s purchase of hughes has paid off handsomely for the world s largest automaker but from the perspective of integrating hughes and gm products the experiment has not panned out some analysts say one attempt was a heads up instrument display like those used on fighter jet cockpits that was incorporated into oldsmobiles and pontiacs but never went anywhere the idea of synergistically combining aerospace technology into the automobile business and applying gm s advanced mass production technology to the high cost aerospace business was an idea straight out of cloud cuckoo land and it never happened said david healy an analyst at burnham securities inc roger smith was a terrible manager but a great investor healy added analysts also pointed out that when gm s industry dominance slipped in the mid 1980s the money it tapped for hughes was unavilable to sink into sorely needed new car and truck programmes indeed hughes chairman c michael armstrong acknowledged wednesday that gm does not need to own hughes to get the benefits of its radar and other aerospace technology but other analysts argued that gm has reaped untold strategic benefits from hughes that are not readily visible to outside observers one of the first benefits gm received was a vast improvement in its systems engineering capabilities said david cole director of the university of michigan s centre for the study of automotive transportation gm s ev1 electric car the industry s first electric vehicle designed from the ground up would not have been possible without hughes delco electronics corp unit which developed the inductive charging system as well as the lead acid batteries another hughes product appearing on gm vehicles is the onstar navigation and security system gm plans to offer the 895 optional system on vehicles outside its cadillac division by the 1998 model year cole said there were numerous other applications for hughes technology including future electric vehicle platforms and other vehicles that incorporate hybrid technologies financially it was excellent said cole the problem is that a lot of people outside don t see the level of integration
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General Motors Corp. said Tuesday its fourth quarter earnings fell by more than half as labour strife slashed production and took a $700 million bite out of profits.
The world's largest automaker earned $786 million, or 92 cents a share, in the fourth quarter, down from $1.6 billion, or $1.95 a share, in the 1995 fourth quarter. All figures exclude results from Electronic Data Systems Corp., which was spun off last June.
GM's fourth quarter revenues fell to $40.95 billion from $41.35 billion.
For all of 1996, GM earned $4.95 billion, or $6.06 a share, down from $6.03 billion, or $7.14 a share. Revenues for the year rose to $164.1 billion from $160.3 billion.
U.S. and Canadian auto workers struck GM plants in October and November, while a United Auto Workers strike at two Dayton, Ohio, brake plants crippled GM's North American production for more than two weeks.
The strikes cut GM's full-year earnings by $1.2 billion and were largely responsible for a fourth quarter loss of $124 million in GM's core North American automotive operations. A year earlier, GM earned $603 million in North America.
"Clearly our 1996 fourth-quarter and calendar-year results were impacted by the strike-related production losses in the United States and Canada and are not indicative of GM's potential for continued profit improvement," GM Chairman John Smith said.
Smith also blamed GM's disappointing 1996 results on factory changeovers for new models and higher expenses for incentives and advertising.
GM's fourth quarter also included several extraordinary items that brought down earnings by $762 million, or 99 cents a share, including the $700 million in strike costs, a $157 million loss on the sale of four parts plants a $167 million charge related to GM's new UAW contract.
In addition, the fourth quarter also included a separate, favourable tax gain of $262 million.
The strikes also ate into 1996 profit-sharing checks for GM's union workers. GM said U.S. 282,000 represented workers in the United States will receive about $300 each -- less than half of the $800 they recived last year and a pittance of the $7,900 that Chrysler Corp. workers will get this year.
GM said 76,000 eligible salaried workers also will receive 1996 profit-sharing checks based on their level of pay and responsibility.
GM Chief Financial Officer J. Michael Losh promised that the 15 new car and truck models that GM is now introducing would bring long-awaited gains in North American market share and profitability in 1997.
GM's U.S. car and truck market share fell to 31 percent in 1996 from 32.4 in 1995.
"As we look forward to 1997, GM will get the bulk of its improvements here in North America, and we do expect to improve year-to-year," Losh told reporters.
The automaker will need the gains to offset a worsening picture in its international operations. GM officials told analysts not to expect increases in international profits for 1997 because of the slumping car market in Europe and spending for new plants in Poland, Argentina, Thailand and China.
GM's fourth quarter international profits fell to $353 million from $498 million a year ago. For the 1996 full year, they fell to $1.5 billion from $1.6 billion in 1995.
In Europe, GM's fourth quarter profits fell 60 percent to $99 million as retail incentive soared to $580 per car from $326 a year earlier.
GM's worldwide wholesale vehicle sales fell 7.1 percent to 1.99 million cars and trucks, with North American shipments off 11.4 percent and international shipments up 0.5 percent.
Analysts said the results were disappointing, but contained a few bright spots, including an increase in GM's year-end cash reserve to $17 billion from $10.2 billion at the end of 1995 and $14.5 billion on September 30, 1996.
"It's a good news, bad news quarter," said Burnham Securities analyst David Healy. "It suggests that if 1997 is normal and largely free of strikes, it ought to be another good year for cash generation."
Cash beyond GM's $13 billion reserve goal may be used to boost stock repurchases, analysts said. Losh said GM wanted to move quickly on the $2.5 billion buyback plan announced Monday. GM stock closed down $1.125 at $60.75 on the New York Stock Exchange.
general motors corp said tuesday its fourth quarter earnings fell by more than half as labour strife slashed production and took a 700 million bite out of profits the world s largest automaker earned 786 million or 92 cents a share in the fourth quarter down from 1 6 billion or 1 95 a share in the 1995 fourth quarter all figures exclude results from electronic data systems corp which was spun off last june gm s fourth quarter revenues fell to 40 95 billion from 41 35 billion for all of 1996 gm earned 4 95 billion or 6 06 a share down from 6 03 billion or 7 14 a share revenues for the year rose to 164 1 billion from 160 3 billion u s and canadian auto workers struck gm plants in october and november while a united auto workers strike at two dayton ohio brake plants crippled gm s north american production for more than two weeks the strikes cut gm s full year earnings by 1 2 billion and were largely responsible for a fourth quarter loss of 124 million in gm s core north american automotive operations a year earlier gm earned 603 million in north america clearly our 1996 fourth quarter and calendar year results were impacted by the strike related production losses in the united states and canada and are not indicative of gm s potential for continued profit improvement gm chairman john smith said smith also blamed gm s disappointing 1996 results on factory changeovers for new models and higher expenses for incentives and advertising gm s fourth quarter also included several extraordinary items that brought down earnings by 762 million or 99 cents a share including the 700 million in strike costs a 157 million loss on the sale of four parts plants a 167 million charge related to gm s new uaw contract in addition the fourth quarter also included a separate favourable tax gain of 262 million the strikes also ate into 1996 profit sharing checks for gm s union workers gm said u s 282 000 represented workers in the united states will receive about 300 each less than half of the 800 they recived last year and a pittance of the 7 900 that chrysler corp workers will get this year gm said 76 000 eligible salaried workers also will receive 1996 profit sharing checks based on their level of pay and responsibility gm chief financial officer j michael losh promised that the 15 new car and truck models that gm is now introducing would bring long awaited gains in north american market share and profitability in 1997 gm s u s car and truck market share fell to 31 percent in 1996 from 32 4 in 1995 as we look forward to 1997 gm will get the bulk of its improvements here in north america and we do expect to improve year to year losh told reporters the automaker will need the gains to offset a worsening picture in its international operations gm officials told analysts not to expect increases in international profits for 1997 because of the slumping car market in europe and spending for new plants in poland argentina thailand and china gm s fourth quarter international profits fell to 353 million from 498 million a year ago for the 1996 full year they fell to 1 5 billion from 1 6 billion in 1995 in europe gm s fourth quarter profits fell 60 percent to 99 million as retail incentive soared to 580 per car from 326 a year earlier gm s worldwide wholesale vehicle sales fell 7 1 percent to 1 99 million cars and trucks with north american shipments off 11 4 percent and international shipments up 0 5 percent analysts said the results were disappointing but contained a few bright spots including an increase in gm s year end cash reserve to 17 billion from 10 2 billion at the end of 1995 and 14 5 billion on september 30 1996 it s a good news bad news quarter said burnham securities analyst david healy it suggests that if 1997 is normal and largely free of strikes it ought to be another good year for cash generation cash beyond gm s 13 billion reserve goal may be used to boost stock repurchases analysts said losh said gm wanted to move quickly on the 2 5 billion buyback plan announced monday gm stock closed down 1 125 at 60 75 on the new york stock exchange
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Federal investigators said on Sunday an examination of engine wreckage from the Delta Comair crash showed the crew tried to shut off the right engine and activate a fire extinguisher system.
Although the pilots took three steps to cut the engine, investigators said they had found no indication there was a fire on the plane when it slammed into a snowy field in rural south-east Michigan late on Thursday afternoon.
"There is no indication of an in-flight fire," National Transportation Safety Board (NTSB) official John Hammerschmidt told reporters at a briefing.
Hammerschmidt said the cockpit voice recorder showed the pilot began a 30-degree banking turn to the left and after three seconds of a stable turn the angle increased.
"Over the next eight-second period of time, the angle of bank increased to approximately 40 degrees. At that point the aircraft departed controlled flight. All data ended approximately 17 seconds after it departed controlled flight," he added.
Hammerschmidt, and the lead NTSB investigator on the scene Richard Rodriguez, did not offer an explanation for the plane's left turn and apparent right engine problems.
Hammerschmidt said that on Monday investigators would begin decontaminating the wreckage and moving it to a building at the local fairgounds where it would be subject to further examination. NTSB officials said they expected to wrap up most on-site work by the end of the week.
Also on Monday investigators in Washington D.C. will resume their study of the "black box" cockpit voice recorder and flight data recorder that were recovered from the wreckage of the Brasilia aircraft, built by Embraer of Brazil.
A local church held a packed memorial service on Sunday attended by relatives of the victims, some of whom visited the scene where a simple memorial had been made from bales of hay.
A blue and white sign perched on a hay bale said, "In memory of the passengers and crew of Comair Flight 3272, from the community of Monroe County and southeast Michigan."
Investigators braved below-zero windchills for the third day in a row on Sunday, retreiving body parts and continuing their probe into the crash, which occurred as the plane was on approach to Detroit Metropolitan Airport from Cincinnati.
Monroe County Medical Examiner David Lieberman said work crews were making good progress in identifying the remains of the 26 passengers and three crew members killed when the plane nosedived to the ground from about 4,000 feet (1,200 metres).
federal investigators said on sunday an examination of engine wreckage from the delta comair crash showed the crew tried to shut off the right engine and activate a fire extinguisher system although the pilots took three steps to cut the engine investigators said they had found no indication there was a fire on the plane when it slammed into a snowy field in rural south east michigan late on thursday afternoon there is no indication of an in flight fire national transportation safety board ntsb official john hammerschmidt told reporters at a briefing hammerschmidt said the cockpit voice recorder showed the pilot began a 30 degree banking turn to the left and after three seconds of a stable turn the angle increased over the next eight second period of time the angle of bank increased to approximately 40 degrees at that point the aircraft departed controlled flight all data ended approximately 17 seconds after it departed controlled flight he added hammerschmidt and the lead ntsb investigator on the scene richard rodriguez did not offer an explanation for the plane s left turn and apparent right engine problems hammerschmidt said that on monday investigators would begin decontaminating the wreckage and moving it to a building at the local fairgounds where it would be subject to further examination ntsb officials said they expected to wrap up most on site work by the end of the week also on monday investigators in washington d c will resume their study of the black box cockpit voice recorder and flight data recorder that were recovered from the wreckage of the brasilia aircraft built by embraer of brazil a local church held a packed memorial service on sunday attended by relatives of the victims some of whom visited the scene where a simple memorial had been made from bales of hay a blue and white sign perched on a hay bale said in memory of the passengers and crew of comair flight 3272 from the community of monroe county and southeast michigan investigators braved below zero windchills for the third day in a row on sunday retreiving body parts and continuing their probe into the crash which occurred as the plane was on approach to detroit metropolitan airport from cincinnati monroe county medical examiner david lieberman said work crews were making good progress in identifying the remains of the 26 passengers and three crew members killed when the plane nosedived to the ground from about 4 000 feet 1 200 metres
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Federal-Mogul Corp hopes to pay off $185 million in debt in 1997, bringing its total debt to capital ratio to under 60 percent by the end of the year, Chairman and Chief Executive Officer Dick Snell said Thursday.
Snell told Reuters in an interview other goals for 1997 include hitting a return on invested capital of 12 percent, although the year's average will probably be below that.
Over the last three years, Federal-Mogul has been earning from 4.5 percent to six percent on its capital -- below its cost of capital of 12 percent.
During 1998, Snell would like the company to be earning a 10 percent return on sales. "Those are goals," he said. "I think we have a reasonable chance of making it, but I'm not promising."
The Southfield, Mich.-based auto parts supplier announced a broad restructuring Thursday that will take it out of the international retail business. The restructuring and other one-time items resulted in a $264 million pre-tax charge.
Federal-Mogul reduced its debt by $104 million in 1996. Debt-to-capital is 69 percent, although Snell said that will fall as the company sells off its retail operations.
Snell said the company has been in contact with possible buyers of the retail operations. A single buyer for the whole package is unlikely, he said, noting the business could be sold in three to 10 different pieces. The firm paid a total of about $125 million for the retail operations.
"We're not going to give away the shareholders' assets," he said. "We're going to demand a good value for them."
Snell said further consolidations of its North American distribution system and European operations are likely on top of those already announced. Those will likely result in more headcount reductions over in the next few years.
Federal-Mogul plans to add a new position of vice president of marketing to improve customer relations, Snell said. Finalsts have been selected for the job, which will also be responsible for shoring up the firm's after-market brands.
"We have some very, very good well known aftermarket brands that haven't had much of any in the way of market support the past several years, which I think is sort of the hidden opportunity this company has," he said.
As it digests the restructuring, Federal-Mogul will also be on the lookout for acquisitions that add to its core manufacturing businesses, said Snell. For instance, since the firm makes engine bearings, it makes sense for it to also offer pistons, he said.
Snell did not rule out the possibilty of an acquisition worth "several hundred million" in 1997 if the right opportunity arises.
Salomon Brothers analyst Darren Kimball said Snell, who has been on the job 95 days, impressed investors and analysts with the moves announced Thursday.
"This is the kind of stock where if the numbers work out, the stock is going to work out because people want to like him," he said.
federal mogul corp hopes to pay off 185 million in debt in 1997 bringing its total debt to capital ratio to under 60 percent by the end of the year chairman and chief executive officer dick snell said thursday snell told reuters in an interview other goals for 1997 include hitting a return on invested capital of 12 percent although the year s average will probably be below that over the last three years federal mogul has been earning from 4 5 percent to six percent on its capital below its cost of capital of 12 percent during 1998 snell would like the company to be earning a 10 percent return on sales those are goals he said i think we have a reasonable chance of making it but i m not promising the southfield mich based auto parts supplier announced a broad restructuring thursday that will take it out of the international retail business the restructuring and other one time items resulted in a 264 million pre tax charge federal mogul reduced its debt by 104 million in 1996 debt to capital is 69 percent although snell said that will fall as the company sells off its retail operations snell said the company has been in contact with possible buyers of the retail operations a single buyer for the whole package is unlikely he said noting the business could be sold in three to 10 different pieces the firm paid a total of about 125 million for the retail operations we re not going to give away the shareholders assets he said we re going to demand a good value for them snell said further consolidations of its north american distribution system and european operations are likely on top of those already announced those will likely result in more headcount reductions over in the next few years federal mogul plans to add a new position of vice president of marketing to improve customer relations snell said finalsts have been selected for the job which will also be responsible for shoring up the firm s after market brands we have some very very good well known aftermarket brands that haven t had much of any in the way of market support the past several years which i think is sort of the hidden opportunity this company has he said as it digests the restructuring federal mogul will also be on the lookout for acquisitions that add to its core manufacturing businesses said snell for instance since the firm makes engine bearings it makes sense for it to also offer pistons he said snell did not rule out the possibilty of an acquisition worth several hundred million in 1997 if the right opportunity arises salomon brothers analyst darren kimball said snell who has been on the job 95 days impressed investors and analysts with the moves announced thursday this is the kind of stock where if the numbers work out the stock is going to work out because people want to like him he said
Doc 13
If Miss Manners, the nation's arbiter of proper taste and decorum, can find good things to say about car dealers, then the industry must be doing something right.
That was the message John Peterson, outgoing president of the National Automobile Dealers Association, delivered on Saturday in a speech that railed against the media and others who say traditional car dealerships are on the way out.
"It's time we stood up for what our industry is doing right out there," said Peterson. "So, to our friends in the media, I say take a tip from one of your own, Miss Manners, and park that old stereotype of fast-talking salesmen in plaid coats and white bucks."
According to Peterson, Miss Manners, whose real name is Judith Martin, wrote a column in 1996 after she shopped for a new car in which she said she was "astonished" at the "dignified courtesy" she found at a dozen dealerships she visted.
Peterson spoke at the opening day of the NADA's 80th annual convention and equipment exposition.
In his remarks, Peterson acknowledged the traditional dealer franchise system is facing numerous challenges from the explosive growth of used car superstores such as CarMax and AutoNation USA.
But he said traditional franchised dealers will remain the dominant system for selling new cars and trucks. In a year when the superstores grew rapidly, Peterson said franchised dealers boosted sales by three percent, increased profits by 25 percent, and finished the year with 23,000 dealerships in operation.
Of the approximately 15 million new light vehicles expected to be sold in 1997, 14.5 million will be sold by the current franchise system.
Peterson also took issue with critics who say car dealers do not respond to customers, saying a recent survey by the Newspaper Association of America indicated that more than 90 percent of new-vehicle buyers are satisified or very satisfied.
"No business is more poked at, picked at, anaylzed, written about and castigated for failing to live up to performance standards that no other business in the country is expected to meet," said Peterson.
In the NADA's keynote speech, Toyota Motor Corp's top executive in the U.S. told the audience that franchised new-car dealers will continue to be the cornerstone of the U.S. automotive retailing industry.
Yale Gieszel, executive vice president of Toyota Motor Sales USA Inc, said consumers -- and not auto superstores -- are driving the changes rocking the business.
"Large retail chains or automobile department stores are not the answer to the challenges we face. The current franchise system will not only survive, it will flourish," he said.
At a news conference afterward, Gieszel said he does not believe the large superstore chains can reap enough economies of scale that they can outperform local franchises. Gieszel also said Toyota is not convinced the large superstores can offer the close customer attention that individual dealers can.
if miss manners the nation s arbiter of proper taste and decorum can find good things to say about car dealers then the industry must be doing something right that was the message john peterson outgoing president of the national automobile dealers association delivered on saturday in a speech that railed against the media and others who say traditional car dealerships are on the way out it s time we stood up for what our industry is doing right out there said peterson so to our friends in the media i say take a tip from one of your own miss manners and park that old stereotype of fast talking salesmen in plaid coats and white bucks according to peterson miss manners whose real name is judith martin wrote a column in 1996 after she shopped for a new car in which she said she was astonished at the dignified courtesy she found at a dozen dealerships she visted peterson spoke at the opening day of the nada s 80th annual convention and equipment exposition in his remarks peterson acknowledged the traditional dealer franchise system is facing numerous challenges from the explosive growth of used car superstores such as carmax and autonation usa but he said traditional franchised dealers will remain the dominant system for selling new cars and trucks in a year when the superstores grew rapidly peterson said franchised dealers boosted sales by three percent increased profits by 25 percent and finished the year with 23 000 dealerships in operation of the approximately 15 million new light vehicles expected to be sold in 1997 14 5 million will be sold by the current franchise system peterson also took issue with critics who say car dealers do not respond to customers saying a recent survey by the newspaper association of america indicated that more than 90 percent of new vehicle buyers are satisified or very satisfied no business is more poked at picked at anaylzed written about and castigated for failing to live up to performance standards that no other business in the country is expected to meet said peterson in the nada s keynote speech toyota motor corp s top executive in the u s told the audience that franchised new car dealers will continue to be the cornerstone of the u s automotive retailing industry yale gieszel executive vice president of toyota motor sales usa inc said consumers and not auto superstores are driving the changes rocking the business large retail chains or automobile department stores are not the answer to the challenges we face the current franchise system will not only survive it will flourish he said at a news conference afterward gieszel said he does not believe the large superstore chains can reap enough economies of scale that they can outperform local franchises gieszel also said toyota is not convinced the large superstores can offer the close customer attention that individual dealers can
Doc 14
The domestic auto industry's chief lobbyist predicted Tuesday that the Republican-led Congress will accept President Clinton's challenge to tone down partisan feuding and develop a better working relationship.
Andrew Card, president and chief executive officer of the American Automobile Manufacturers Association, said the group generally supports the agenda Clinton outlined after his inaguration Monday of a leaner government and a balanced federal budget.
"The second Clinton administration presents both opportunities and concerns to the auto industry," Card said during a lunchtime address to the Automotive Press Association.
In general, Card said federal regulators need to do a better job of understanding the domestic issues facing the Big Three automakers and work harder at opening up global markets, where the biggest growth potential lies.
"There is a natural tension between government and industry, and I think that natural tension is good," he said. "But the government has to recognise a role that is increasingly in favour of the industry rather than against it."
The AAMA represents General Motors Corp., Ford Motor Co. and Chrysler Corp. from large offices in Washington D.C., Detroit and nine regional sites around the country. The Detroit automakers employ about 700,000 people directly and account for about 4.5 percent of the nation's gross domestic product. Including suppliers and dealers, work generated by the Big Three is responsible for 2.3 million jobs, Card said.
He said he wants the federal government to step up pressure on the Japan to boost the value of the yen. A cheaper yen allows Japanese automakers to produce vehicles in Japan at a lower cost than what the domestic automakers can produce them for in the United States.
"I am very, very troubled that the yen is at about a 46-month low," Card said.
AAMA believes the market should be allowed to set the true value of the yen, and not the government of Japan, which has been pushing the yen down against the dollar and other currencies, he said. The yen is now worth about 118 to the dollar, up dramatically from 79, where it was 18 months ago.
On other matters, Card warned that "irresponsible standards" proposed for the National Ambient Air Quality Standards could seriously affect U.S. economic growth. The Clean Air Act requires the U.S. Environmental Protection Agency to review the standards periodically.
The comment period for the standards ends Feb. 18. The new rules are due in June, but Card said he hopes the government delays that date.
the domestic auto industry s chief lobbyist predicted tuesday that the republican led congress will accept president clinton s challenge to tone down partisan feuding and develop a better working relationship andrew card president and chief executive officer of the american automobile manufacturers association said the group generally supports the agenda clinton outlined after his inaguration monday of a leaner government and a balanced federal budget the second clinton administration presents both opportunities and concerns to the auto industry card said during a lunchtime address to the automotive press association in general card said federal regulators need to do a better job of understanding the domestic issues facing the big three automakers and work harder at opening up global markets where the biggest growth potential lies there is a natural tension between government and industry and i think that natural tension is good he said but the government has to recognise a role that is increasingly in favour of the industry rather than against it the aama represents general motors corp ford motor co and chrysler corp from large offices in washington d c detroit and nine regional sites around the country the detroit automakers employ about 700 000 people directly and account for about 4 5 percent of the nation s gross domestic product including suppliers and dealers work generated by the big three is responsible for 2 3 million jobs card said he said he wants the federal government to step up pressure on the japan to boost the value of the yen a cheaper yen allows japanese automakers to produce vehicles in japan at a lower cost than what the domestic automakers can produce them for in the united states i am very very troubled that the yen is at about a 46 month low card said aama believes the market should be allowed to set the true value of the yen and not the government of japan which has been pushing the yen down against the dollar and other currencies he said the yen is now worth about 118 to the dollar up dramatically from 79 where it was 18 months ago on other matters card warned that irresponsible standards proposed for the national ambient air quality standards could seriously affect u s economic growth the clean air act requires the u s environmental protection agency to review the standards periodically the comment period for the standards ends feb 18 the new rules are due in june but card said he hopes the government delays that date
Doc 15
Ford Motor Co. halted light truck assembly lines at three plants Friday as planned because of a strike at a seat supplier, but signed up another company to help it clear out the backlog of 7,700 Expeditions built without proper seats.
Following an appeal from Ford Chairman Alex Trotman, Lear Corp. Chairman Kenneth Way agreed to have his company make seats for Ford's Expedition full-size sport utility vehicle once the walkout is settled, according to sources in the supply industry.
Under the arrangement, Lear, which already is a large Ford supplier, would make second and third row seats for the Expedition, said Donna Parolini, president of International Business Development Corp., a consulting firm in Troy, Mich.
Front seats for the vehicles are being made by Ford's Chesterfield, Mich., trim plant, Ford officials have said. Ford spokesman Bert Serre said the plant has been making a limited number of seats, less than 20 an hour.
Ford suspended all production at its Michigan Assembly in Wayne, which makes the Expedition and F-Series pickup trucks, after the United Auto Workers and Johnson Controls Inc. failed to settle a strike, which entered its 11th day Friday.
Ohio plants affected were the Econoline and Club Wagon full-size van assembly line in Lorain and a frame production line at Ohio Assembly in Avon Lake. About 6,800 workers were idled as a result of the action.
Industry analysts said the strike has Ford in a huge bind. The Expedition is one of its most profitable and popular vehicles, earning Ford an estimated pre-tax profit of $10,000 each. Under normal production, it makes 840 vehicles at day Michigan Truck, the only plant where the Expedition is made.
But to avoid angering its own UAW workers, Ford refused to accept seats made by non-union replacement workers. It had been making the vehicles with temporary seats. But after making about 14,800 Expeditions and Econolines without proper seats, Ford decided to shut production down completely.
"To interrupt Expedition production for any extended period of time would hurt Ford financially in North America," said Michael Robinet, managing director of CSM Forecasting in Farmington Hills, Mich.
Because Ford and Lear do not want to provoke the UAW, Lear, which has unionized plants, would not start producing seats until the strike is over, said Parolini. Another issue prohibiting Lear from making seats immediately is the fact that it buys seat frames from the same Johnson Controls facility that assembles seats for Ford.
Shutting down Expedition production means an extension of the three- to six-month wait that many consumers already face. Introduced last fall, the Expedition has been a huge hit with buyers looking for a sleek, larger sport utility.
"The reception of this vehicle has been the highest of anything I've seen since the original Mustang," said Lou Stanford, owner of Varsity Ford in Ann Arbor, Mich., one of the largest Ford dealers in the country.
About 500 UAW members struck Johnson Controls seat plants January 28 in Plymouth, Mich., and Oberlin, Ohio, when talks broke down on a new contract.
Jeff Steiner, a spokesman for Johnson Controls' automotive unit, said no talks occurred Friday after they broke off late Thursday. No new negotiations were scheduled for the weekend.
Steiner declined to characterize the discussions, which have restarted and collapsed several times since the strike began over terms for a new contract.
ford motor co halted light truck assembly lines at three plants friday as planned because of a strike at a seat supplier but signed up another company to help it clear out the backlog of 7 700 expeditions built without proper seats following an appeal from ford chairman alex trotman lear corp chairman kenneth way agreed to have his company make seats for ford s expedition full size sport utility vehicle once the walkout is settled according to sources in the supply industry under the arrangement lear which already is a large ford supplier would make second and third row seats for the expedition said donna parolini president of international business development corp a consulting firm in troy mich front seats for the vehicles are being made by ford s chesterfield mich trim plant ford officials have said ford spokesman bert serre said the plant has been making a limited number of seats less than 20 an hour ford suspended all production at its michigan assembly in wayne which makes the expedition and f series pickup trucks after the united auto workers and johnson controls inc failed to settle a strike which entered its 11th day friday ohio plants affected were the econoline and club wagon full size van assembly line in lorain and a frame production line at ohio assembly in avon lake about 6 800 workers were idled as a result of the action industry analysts said the strike has ford in a huge bind the expedition is one of its most profitable and popular vehicles earning ford an estimated pre tax profit of 10 000 each under normal production it makes 840 vehicles at day michigan truck the only plant where the expedition is made but to avoid angering its own uaw workers ford refused to accept seats made by non union replacement workers it had been making the vehicles with temporary seats but after making about 14 800 expeditions and econolines without proper seats ford decided to shut production down completely to interrupt expedition production for any extended period of time would hurt ford financially in north america said michael robinet managing director of csm forecasting in farmington hills mich because ford and lear do not want to provoke the uaw lear which has unionized plants would not start producing seats until the strike is over said parolini another issue prohibiting lear from making seats immediately is the fact that it buys seat frames from the same johnson controls facility that assembles seats for ford shutting down expedition production means an extension of the three to six month wait that many consumers already face introduced last fall the expedition has been a huge hit with buyers looking for a sleek larger sport utility the reception of this vehicle has been the highest of anything i ve seen since the original mustang said lou stanford owner of varsity ford in ann arbor mich one of the largest ford dealers in the country about 500 uaw members struck johnson controls seat plants january 28 in plymouth mich and oberlin ohio when talks broke down on a new contract jeff steiner a spokesman for johnson controls automotive unit said no talks occurred friday after they broke off late thursday no new negotiations were scheduled for the weekend steiner declined to characterize the discussions which have restarted and collapsed several times since the strike began over terms for a new contract
Doc 16
The Explorer from Ford Motor Co., one of the brightest stars in the sport utility segment, looks headed to its first ever sales incentives.
Explorer, the best-selling four-door vehicle in the country for nearly two years, is facing its stiffest competition since it was introduced six years ago.
Ironically, some of that will come from the new Expedition full-sized sport utility that Ford is now introducing. The Explorer is also battling subsidised leases on competitive models that have made Chrysler Corp. Cherokees available for as little as $199 a month.
"We expect by the end of the year, they will most likely have begun some type of national programme on the Explorer," said Wesley Brown, director of global product analysis at CSM Forecasting, a consultant in Farmington Hills, Mich.
In a research report published earlier this week, Salomon Brothers analyst Jack Kirnan predicted Ford will launch lease incentives and other marketing support on the Explorer in the next 60 days.
"We strongly suspect that the all-new Expedition full-size sport utility will begin to cannibalize some sales from the Explorer, which alone should force Ford to implement incentives on the vehicle," said Kirnan.
Ford executives have said the Expedition, based on a modified platform of the new F-150 pickup truck, will steal 10 percent to 15 percent of the smaller Explorer's sales. Analysts believe Ford's internal projections have underestimated the Expedition's effects.
Explorer sales are already being hurt by the new Mercury Mountaineer, which is taking production capacity away from its sister Ford Division vehicle.
Including sales from August announced Thursday, Explorer sales have dropped five months in a row. For the month, sales were 27,615, down 10.7 percent. So far this year, sales of the sport utility were 264,996, 3.5 percent ahead of 1995.
Ford did not act as it were worried about hurting sales when it priced the 1997 Explorer. After quietly raising prices $200 at the end of the 1996 model year, Ford boosted the price for most Explorers another $315, one of the steepest in the model line. Going along with the price hikes, however, are some improved equipment features for the 1997 model year.
Jim Bright, a Ford Division spokesman, declined to discuss the possibilty of Explorer incentives. He noted the Explorer has faced tough competition before.
"We've never had a penny of incentive money on Explorer," he said. "People keep coming after us. To date, we have not had to take that action."
the explorer from ford motor co one of the brightest stars in the sport utility segment looks headed to its first ever sales incentives explorer the best selling four door vehicle in the country for nearly two years is facing its stiffest competition since it was introduced six years ago ironically some of that will come from the new expedition full sized sport utility that ford is now introducing the explorer is also battling subsidised leases on competitive models that have made chrysler corp cherokees available for as little as 199 a month we expect by the end of the year they will most likely have begun some type of national programme on the explorer said wesley brown director of global product analysis at csm forecasting a consultant in farmington hills mich in a research report published earlier this week salomon brothers analyst jack kirnan predicted ford will launch lease incentives and other marketing support on the explorer in the next 60 days we strongly suspect that the all new expedition full size sport utility will begin to cannibalize some sales from the explorer which alone should force ford to implement incentives on the vehicle said kirnan ford executives have said the expedition based on a modified platform of the new f 150 pickup truck will steal 10 percent to 15 percent of the smaller explorer s sales analysts believe ford s internal projections have underestimated the expedition s effects explorer sales are already being hurt by the new mercury mountaineer which is taking production capacity away from its sister ford division vehicle including sales from august announced thursday explorer sales have dropped five months in a row for the month sales were 27 615 down 10 7 percent so far this year sales of the sport utility were 264 996 3 5 percent ahead of 1995 ford did not act as it were worried about hurting sales when it priced the 1997 explorer after quietly raising prices 200 at the end of the 1996 model year ford boosted the price for most explorers another 315 one of the steepest in the model line going along with the price hikes however are some improved equipment features for the 1997 model year jim bright a ford division spokesman declined to discuss the possibilty of explorer incentives he noted the explorer has faced tough competition before we ve never had a penny of incentive money on explorer he said people keep coming after us to date we have not had to take that action
Doc 17
Bargaining between union and American Axle Manufacturing Inc. negotiators was expected to continue up to the midnight Friday deadline to avoid a strike that would quickly paralyze General Motors Corp.'s U.S. light truck production.
About 7,200 United Auto Workers union members were ready to walk off the job at five plants in Detroit, Three Rivers, Mich., and Buffalo, N.Y., if no agreement was reached on a new three-year contract.
American Axle, which was spun off from GM into a private company in 1994, supplies virtually all of the rear axles for GM's pickup trucks and sport utility vehicles, axles for the Camero and Firebird rear-drive cars, as well as various parts for other passenger car lines.
The company also makes axles for Chrysler Corp. and axle shafts for Ford Motor Co..
Tight inventories at American Axle and Dana Corp., the other primary axle maker in the United States, means GM's light truck plants would run out of parts by early next week, analysts said.
"They can't have more than two days supply because there is no excess capacity in the industry," said James Harbour, president of Harbour & Associates Inc., a Troy, Mich.-based consulting firm.
Burnham Securities Inc. analyst David Healy estimated GM could lose $20 million a day in after-tax profits if it was forced to suspend light truck production. Labor strife cost the world's largest automaker $1.2 billion in 1996.
The American Axle situation is the latest labor dispute to flare up in the automotive supplier industry since the beginning of the year. Analysts say they signal a new era as the UAW steps up efforts to organize more component workforces and bring pay levels in line with those of the Big Three.
"It's the next phase of the evolution of change," said Donna Parolini, president of International Business Development Corp., a Troy, Mich. supplier consulting firm.
UAW membership among independent, or non-Big Three, suppliers has dropped dramatically over the last 20 years so that now less than 20 percent of the independent parts workers belong to the UAW, she said.
The American Axle talks are notable because they mark the first time a GM spin-off has had to negotiate a new contract. When the firm was spun off under former Chrysler manufacturing chief Richard Dauch, it agreed to uphold terms of the previous UAW contract, which expired last September.
Union officials have said the company is balking at following the Big Three pattern deal hammered out last fall. That contract guarantees employment for 95 percent of current workers, and allows automakers to pay new hires at 70 percent of the starting base hourly wage of about $19.
Amrican Axle, however, wants to start new hires at 60 percent of the base wage -- and extend the time it takes to reach the full rate to six years. The Big Three pact has a "grow-in" rate of three years.
Last month, two Johnson Controls Inc. seat plants were hit with strikes by newly organized UAW workers. As of the Friday an agreement had not been reached in the 18-day-old strike.
The walkouts prompted Ford to take the unprecedented action of refusing to accept seats made by non-union replacements. Ford later signed up Johnson Controls' main competitor, Lear Corp., to supply it with seats for the Expedition full-size sport utility vehicle, one of those affected by the strike.
Parolini released figures Friday that showed the global supplier industry consolidating at a faster rate than previously thought. By the end of this year, there will be about 8,000 suppliers -- down from 30,000 in 1988.
In the past 22 months, there have been more than 320 acqusitions or mergers valued at a total of $32 billion. The mergers will likely result in layoffs as the companies seek to gain efficiencies. For instance, Parolini said companies such as Lear and Johnson Controls have issued internal mandates to reduce headcount by 20 percent next year.
bargaining between union and american axle manufacturing inc negotiators was expected to continue up to the midnight friday deadline to avoid a strike that would quickly paralyze general motors corp s u s light truck production about 7 200 united auto workers union members were ready to walk off the job at five plants in detroit three rivers mich and buffalo n y if no agreement was reached on a new three year contract american axle which was spun off from gm into a private company in 1994 supplies virtually all of the rear axles for gm s pickup trucks and sport utility vehicles axles for the camero and firebird rear drive cars as well as various parts for other passenger car lines the company also makes axles for chrysler corp and axle shafts for ford motor co tight inventories at american axle and dana corp the other primary axle maker in the united states means gm s light truck plants would run out of parts by early next week analysts said they can t have more than two days supply because there is no excess capacity in the industry said james harbour president of harbour amp associates inc a troy mich based consulting firm burnham securities inc analyst david healy estimated gm could lose 20 million a day in after tax profits if it was forced to suspend light truck production labor strife cost the world s largest automaker 1 2 billion in 1996 the american axle situation is the latest labor dispute to flare up in the automotive supplier industry since the beginning of the year analysts say they signal a new era as the uaw steps up efforts to organize more component workforces and bring pay levels in line with those of the big three it s the next phase of the evolution of change said donna parolini president of international business development corp a troy mich supplier consulting firm uaw membership among independent or non big three suppliers has dropped dramatically over the last 20 years so that now less than 20 percent of the independent parts workers belong to the uaw she said the american axle talks are notable because they mark the first time a gm spin off has had to negotiate a new contract when the firm was spun off under former chrysler manufacturing chief richard dauch it agreed to uphold terms of the previous uaw contract which expired last september union officials have said the company is balking at following the big three pattern deal hammered out last fall that contract guarantees employment for 95 percent of current workers and allows automakers to pay new hires at 70 percent of the starting base hourly wage of about 19 amrican axle however wants to start new hires at 60 percent of the base wage and extend the time it takes to reach the full rate to six years the big three pact has a grow in rate of three years last month two johnson controls inc seat plants were hit with strikes by newly organized uaw workers as of the friday an agreement had not been reached in the 18 day old strike the walkouts prompted ford to take the unprecedented action of refusing to accept seats made by non union replacements ford later signed up johnson controls main competitor lear corp to supply it with seats for the expedition full size sport utility vehicle one of those affected by the strike parolini released figures friday that showed the global supplier industry consolidating at a faster rate than previously thought by the end of this year there will be about 8 000 suppliers down from 30 000 in 1988 in the past 22 months there have been more than 320 acqusitions or mergers valued at a total of 32 billion the mergers will likely result in layoffs as the companies seek to gain efficiencies for instance parolini said companies such as lear and johnson controls have issued internal mandates to reduce headcount by 20 percent next year
Doc 18
Bargaining between union and American Axle Manufacturing Inc. negotiators was expected to continue up to the midnight Friday deadline to avoid a strike that would quickly paralyse General Motors Corp.'s U.S. light truck production.
About 7,200 United Auto Workers union members were ready to walk off the job at five plants in Detroit, Three Rivers, Mich., and Buffalo, N.Y., if no agreement was reached on a new three-year contract.
American Axle, which was spun off from GM into a private company in 1994, supplies virtually all of the rear axles for GM's pickup trucks and sport utility vehicles, axles for the Camero and Firebird rear-drive cars, as well as various parts for other passenger car lines.
The company also makes axles for Chrysler Corp. and axle shafts for Ford Motor Co.
Tight inventories at American Axle and Dana Corp., the other primary axle maker in the United States, means GM's light truck plants would run out of parts by early next week, analysts said.
"They can't have more than two days supply because there is no excess capacity in the industry," said James Harbour, president of Harbour & Associates Inc., a Troy, Mich.-based consulting firm.
Burnham Securities Inc. analyst David Healy estimated GM could lose $20 million a day in after-tax profits if it was forced to suspend light truck production. Labour strife cost the world's largest automaker $1.2 billion in 1996.
The American Axle situation is the latest labour dispute to flare up in the automotive supplier industry since the beginning of the year. Analysts say they signal a new era as the UAW steps up efforts to organise more component workforces and bring pay levels in line with those of the Big Three.
"It's the next phase of the evolution of change," said Donna Parolini, president of International Business Development Corp., a Troy, Mich. supplier consulting firm.
UAW membership among independent, or non-Big Three, suppliers has dropped dramatically over the last 20 years so that now less than 20 percent of the independent parts workers belong to the UAW, she said.
The American Axle talks are notable because they mark the first time a GM spin-off has had to negotiate a new contract. When the firm was spun off under former Chrysler manufacturing chief Richard Dauch, it agreed to uphold terms of the previous UAW contract, which expired last September.
Union officials have said the company is balking at following the Big Three pattern deal hammered out last fall. That contract guarantees employment for 95 percent of current workers, and allows automakers to pay new hires at 70 percent of the starting base hourly wage of about $19.
Amrican Axle, however, wants to start new hires at 60 percent of the base wage -- and extend the time it takes to reach the full rate to six years. The Big Three pact has a "grow-in" rate of three years.
Last month, two Johnson Controls Inc. seat plants were hit with strikes by newly organised UAW workers. As of the Friday an agreement had not been reached in the 18-day-old strike.
The walkouts prompted Ford to take the unprecedented action of refusing to accept seats made by non-union replacements. Ford later signed up Johnson Controls' main competitor, Lear Corp., to supply it with seats for the Expedition full-size sport utility vehicle, one of those affected by the strike.
Parolini released figures Friday that showed the global supplier industry consolidating at a faster rate than previously thought. By the end of this year, there will be about 8,000 suppliers -- down from 30,000 in 1988.
In the past 22 months, there have been more than 320 acqusitions or mergers valued at a total of $32 billion. The mergers will likely result in layoffs as the companies seek to gain efficiencies. For instance, Parolini said companies such as Lear and Johnson Controls have issued internal mandates to reduce headcount by 20 percent next year.
bargaining between union and american axle manufacturing inc negotiators was expected to continue up to the midnight friday deadline to avoid a strike that would quickly paralyse general motors corp s u s light truck production about 7 200 united auto workers union members were ready to walk off the job at five plants in detroit three rivers mich and buffalo n y if no agreement was reached on a new three year contract american axle which was spun off from gm into a private company in 1994 supplies virtually all of the rear axles for gm s pickup trucks and sport utility vehicles axles for the camero and firebird rear drive cars as well as various parts for other passenger car lines the company also makes axles for chrysler corp and axle shafts for ford motor co tight inventories at american axle and dana corp the other primary axle maker in the united states means gm s light truck plants would run out of parts by early next week analysts said they can t have more than two days supply because there is no excess capacity in the industry said james harbour president of harbour amp associates inc a troy mich based consulting firm burnham securities inc analyst david healy estimated gm could lose 20 million a day in after tax profits if it was forced to suspend light truck production labour strife cost the world s largest automaker 1 2 billion in 1996 the american axle situation is the latest labour dispute to flare up in the automotive supplier industry since the beginning of the year analysts say they signal a new era as the uaw steps up efforts to organise more component workforces and bring pay levels in line with those of the big three it s the next phase of the evolution of change said donna parolini president of international business development corp a troy mich supplier consulting firm uaw membership among independent or non big three suppliers has dropped dramatically over the last 20 years so that now less than 20 percent of the independent parts workers belong to the uaw she said the american axle talks are notable because they mark the first time a gm spin off has had to negotiate a new contract when the firm was spun off under former chrysler manufacturing chief richard dauch it agreed to uphold terms of the previous uaw contract which expired last september union officials have said the company is balking at following the big three pattern deal hammered out last fall that contract guarantees employment for 95 percent of current workers and allows automakers to pay new hires at 70 percent of the starting base hourly wage of about 19 amrican axle however wants to start new hires at 60 percent of the base wage and extend the time it takes to reach the full rate to six years the big three pact has a grow in rate of three years last month two johnson controls inc seat plants were hit with strikes by newly organised uaw workers as of the friday an agreement had not been reached in the 18 day old strike the walkouts prompted ford to take the unprecedented action of refusing to accept seats made by non union replacements ford later signed up johnson controls main competitor lear corp to supply it with seats for the expedition full size sport utility vehicle one of those affected by the strike parolini released figures friday that showed the global supplier industry consolidating at a faster rate than previously thought by the end of this year there will be about 8 000 suppliers down from 30 000 in 1988 in the past 22 months there have been more than 320 acqusitions or mergers valued at a total of 32 billion the mergers will likely result in layoffs as the companies seek to gain efficiencies for instance parolini said companies such as lear and johnson controls have issued internal mandates to reduce headcount by 20 percent next year
Doc 19
Talks aimed at settling a dispute between the United Auto Workers and Johnson Controls Inc. continued Thursday afternoon, as Ford Motor Co. prepared to idle light truck production lines at three plants.
Johnson Controls spokesman Jeff Steiner said in a recorded message that talks were continuing as of mid-afternoon to resolve the strike, which entered its 10th day Thursday.
About 500 UAW workers walked off the job Jan. 28 at two Johnson Controls seat plants in Plymouth, Mich., and Oberlin, Ohio, after talks on a new contract collapsed.
The plants conduct final seat assembly for the Ford Expedition full-size sport utility, and Econoline and Club Wagons full-size vans.
With no sign that a settlement is near, Ford is sticking with plans to idle all of its Michigan Truck Assembly plant, and part of two other facilities in Ohio, said Ford spokesman Bert Serre.
On Wednesday, Ford said it would suspend production at the plants if the two sides did not resolve their issues, a move that would idle about 6,800 hourly workers.
Ford has refused to accept seats made by non-union labour, but has continued to make and store Expeditions and Econolines, using temporary seats to finish production.
When production of the current shifts concludes, Ford will have made 7,700 Expeditions and 7,100 full-size vans without regular seats, Serre said. He declined to comment on the how much the shutdown would cost the automaker.
Analysts have said Ford earns $10,000 in pre-tax profits on the Expedition, one of its most popular and profitable vehicles. Normally, Ford makes 42 Expeditions an hour, or 840 vehicles a day during two 10-hour shifts at Michigan Truck.
Because Ford makes its F-Series pickup trucks on the same line as the Expedition, the company said stopping Expedition production will also force it to halt F-Series assembly.
Ohio plants affected are the van assembly line in Lorain, and a frame production line at Ford's Ohio Assembly in Avon Lake.
Taking cues from Ford, Johnson Controls did not stand in the way of UAW organising efforts at the plants last fall. The UAW has been stepping up efforts to organise auto suppliers to boost its falling membership base.
The union says it wants seat workers at the two plants to receive pay levels competitive with other seat manufacturers. But Johnson Controls maintains its offer is competitive with what the UAW has accepted elsewhere.
talks aimed at settling a dispute between the united auto workers and johnson controls inc continued thursday afternoon as ford motor co prepared to idle light truck production lines at three plants johnson controls spokesman jeff steiner said in a recorded message that talks were continuing as of mid afternoon to resolve the strike which entered its 10th day thursday about 500 uaw workers walked off the job jan 28 at two johnson controls seat plants in plymouth mich and oberlin ohio after talks on a new contract collapsed the plants conduct final seat assembly for the ford expedition full size sport utility and econoline and club wagons full size vans with no sign that a settlement is near ford is sticking with plans to idle all of its michigan truck assembly plant and part of two other facilities in ohio said ford spokesman bert serre on wednesday ford said it would suspend production at the plants if the two sides did not resolve their issues a move that would idle about 6 800 hourly workers ford has refused to accept seats made by non union labour but has continued to make and store expeditions and econolines using temporary seats to finish production when production of the current shifts concludes ford will have made 7 700 expeditions and 7 100 full size vans without regular seats serre said he declined to comment on the how much the shutdown would cost the automaker analysts have said ford earns 10 000 in pre tax profits on the expedition one of its most popular and profitable vehicles normally ford makes 42 expeditions an hour or 840 vehicles a day during two 10 hour shifts at michigan truck because ford makes its f series pickup trucks on the same line as the expedition the company said stopping expedition production will also force it to halt f series assembly ohio plants affected are the van assembly line in lorain and a frame production line at ford s ohio assembly in avon lake taking cues from ford johnson controls did not stand in the way of uaw organising efforts at the plants last fall the uaw has been stepping up efforts to organise auto suppliers to boost its falling membership base the union says it wants seat workers at the two plants to receive pay levels competitive with other seat manufacturers but johnson controls maintains its offer is competitive with what the uaw has accepted elsewhere
Doc 20
American Axle & Manufacturing Inc. reached a tentative contract with the United Auto Workers minutes before a strike deadline Monday morning, sparing General Motors Corp. a potentially punishing work stoppage.
Details of the agreement were withheld pending ratification by about 7,200 UAW members at five plants in Detroit, Three Rivers, Mich., Buffalo, N.Y., and Tonawanda, N.Y., later this week.
UAW President Stephen Yokich and Vice President Richard Shoemaker released a statement describing the pact as "an excellent new agreement." Company officials did not return telephone calls.
The tentative contract was reached 15 minutes before the 7 a.m. strike deadline. Union and company bargainers negotiated through a midnight Friday deadline and nearly non-stop over the weekend, while UAW members stayed on the job and refrained from putting up picket lines.
But by late Sunday evening no agreement had been reached, and UAW officials set the Monday strike deadline to put more pressure on the company.
American Axle supplies rear axles for GM's pickup trucks and sport utility vehicles, axles for the Camero and Firebird rear- drive cars, as well as parts for other passenger cars.
A strike would have forced the world's largest automaker to suspend production at its 11 North American light truck plants within two days, according to analysts, because of tight axle inventories throughout the auto industry. That could have cost GM $20 million a day in profits, analysts said.
A work stoppage would also have added to Ford Motor Co.'s supplier headaches. American Axle makes axle shafts for Ford's F-150 pickup trucks, Expedition and Explorer sport utility vehicles, as well as some rear-drive cars. The company also makes a small number of parts for Chrysler Corp.
GM spokesman Gerald Holmes said Monday the automaker did not alter its contract with American Axle to pave the way for a settlement.
"We had no part in it at all," he said.
American Axle was spun off from GM in 1994 to a group of investors led by former Chrysler manufacturing chief Richard Dauch. As part of the deal, the components maker agreed to honour the terms of the 1993-96 UAW-GM contract.
In the talks that wrapped up Monday -- the first time a GM spin-off had to negotiate a new contract -- UAW officials had been pressing for American Axle to follow the pattern the Big Three agreed to during their contract talks last fall.
Company officials were reluctant to do that, however, claiming that would put them at a competitive disadvantage with their competitors.
american axle amp manufacturing inc reached a tentative contract with the united auto workers minutes before a strike deadline monday morning sparing general motors corp a potentially punishing work stoppage details of the agreement were withheld pending ratification by about 7 200 uaw members at five plants in detroit three rivers mich buffalo n y and tonawanda n y later this week uaw president stephen yokich and vice president richard shoemaker released a statement describing the pact as an excellent new agreement company officials did not return telephone calls the tentative contract was reached 15 minutes before the 7 a m strike deadline union and company bargainers negotiated through a midnight friday deadline and nearly non stop over the weekend while uaw members stayed on the job and refrained from putting up picket lines but by late sunday evening no agreement had been reached and uaw officials set the monday strike deadline to put more pressure on the company american axle supplies rear axles for gm s pickup trucks and sport utility vehicles axles for the camero and firebird rear drive cars as well as parts for other passenger cars a strike would have forced the world s largest automaker to suspend production at its 11 north american light truck plants within two days according to analysts because of tight axle inventories throughout the auto industry that could have cost gm 20 million a day in profits analysts said a work stoppage would also have added to ford motor co s supplier headaches american axle makes axle shafts for ford s f 150 pickup trucks expedition and explorer sport utility vehicles as well as some rear drive cars the company also makes a small number of parts for chrysler corp gm spokesman gerald holmes said monday the automaker did not alter its contract with american axle to pave the way for a settlement we had no part in it at all he said american axle was spun off from gm in 1994 to a group of investors led by former chrysler manufacturing chief richard dauch as part of the deal the components maker agreed to honour the terms of the 1993 96 uaw gm contract in the talks that wrapped up monday the first time a gm spin off had to negotiate a new contract uaw officials had been pressing for american axle to follow the pattern the big three agreed to during their contract talks last fall company officials were reluctant to do that however claiming that would put them at a competitive disadvantage with their competitors
Doc 21
Ford Motor Co.'s sales tumbled 6.3 percent in the month of August as the No. 2 automaker reported worse-than-expected results Thursday in both its car and normally strong light truck business.
Ford reported U.S. sales of 297,726, down from 317,621 in the year-ago month. Sales of domestically produced cars fell 6.8 percent on a daily selling basis to 134,110. Sales of its pickup trucks, minivans and sport/utility vehicles totalled 161,549, a decline of 4.4 percent.
In a slight to Ford's quest for its Taurus to be the best-selling car for 1996, its sales for the first eight months slipped behind those of its nemisis, Honda Motor Co.'s Accord, by 1,409 units.
Results from Ford, the last automaker to report, capped a mixed month for Detroit's Big Three and contributed to a 2.3 percent total industry decline to 1,307,858 units for August.
Total sales of North American-built cars were off 6.7 percent to 608,140. That was partially offset by a 3.7 percent increase in domestically produced light trucks, to 513,376.
The seasonally adjusted annual selling rate finished the month at a healthy 15.8 million units. However, analysts said factors provided by the U.S. Department of Commerce to compute the rate artifically inflated it by about 500,000 units.
Those same factors made the July rate seem weak at 14.3 million units, analysts said. In August 1995, the rate was 15.7 million units, the second-highest of the year.
Ford portrayed its August sales slump as part of the expected drop-off in second-half sales for 1996.
"As anticipated, the automotive market has slowed somewhat since earlier this year," said Robert Rewey, Group Vice President of Marketing and Sales. "In recent months we've seen interest rate increases for automotive financing that clearly have influenced industry-wide demand."
Ford said vehicles sold at a seasonally adjusted annual rate of 15.8 million unit sales for the first five months of 1996. The automaker continues to forecast 1996 total industry U.S. sales at 15.4 million to 15.5 million units. Sales for all of 1995 were 15.1 million.
At least one analyst welcomed the lower August industry numbers, saying they might make the Federal Reserve Board re-think any possible interest rate hikes.
"The lower the better," said Lehman Brothers analyst Joeseph Phillippi. "Maybe they'll keep the Fed quiet."
In August, Ford's normally strong light truck business was hurt by a decline in government sales, competitive pricing pressures and production shortages of key F-150 models.
F-Series sales inched up 1.7 percent to 58,095.
Explorer sales, which have fallen in recent months due to the production startup of its sister, the Mercury Mountaineer, were down almost 11 percent to 27,615.
On the car side, Contour sales sank 35 percent to 10,487, while Mystique sales were down 18 percent to 5,041. Taurus sales were 25,570, a 2 percent increase, which brought total sales this year to 250,212. But that was not enough to top the Accord, which sold 251,621 cars year-to-date.
Ford said it has scheduled a nearly 14 percent increase in fourth-quarter North American truck production, to 632,000 units, to meet expected future demand for its popular F-Series.
Car production is scheduled to fall 4 percent to 431,000 for the same period. Total fourth-quarter North American output is forecast at 1,063,000, an increase of about 5 percent from the fourth quarter of 1995.
On Wednesday, General Motors Corp. said total car and truck sales fell 7.9 percent, led by a nearly 14 percent drop in passenger car sales.
Chrysler Corp. was the only one of the Big Three to post a sales increase. It reported earlier this week that sales rose 9.2 percent, helped by a strong performance from minivans, sport/utilities and pickup trucks.
ford motor co s sales tumbled 6 3 percent in the month of august as the no 2 automaker reported worse than expected results thursday in both its car and normally strong light truck business ford reported u s sales of 297 726 down from 317 621 in the year ago month sales of domestically produced cars fell 6 8 percent on a daily selling basis to 134 110 sales of its pickup trucks minivans and sport utility vehicles totalled 161 549 a decline of 4 4 percent in a slight to ford s quest for its taurus to be the best selling car for 1996 its sales for the first eight months slipped behind those of its nemisis honda motor co s accord by 1 409 units results from ford the last automaker to report capped a mixed month for detroit s big three and contributed to a 2 3 percent total industry decline to 1 307 858 units for august total sales of north american built cars were off 6 7 percent to 608 140 that was partially offset by a 3 7 percent increase in domestically produced light trucks to 513 376 the seasonally adjusted annual selling rate finished the month at a healthy 15 8 million units however analysts said factors provided by the u s department of commerce to compute the rate artifically inflated it by about 500 000 units those same factors made the july rate seem weak at 14 3 million units analysts said in august 1995 the rate was 15 7 million units the second highest of the year ford portrayed its august sales slump as part of the expected drop off in second half sales for 1996 as anticipated the automotive market has slowed somewhat since earlier this year said robert rewey group vice president of marketing and sales in recent months we ve seen interest rate increases for automotive financing that clearly have influenced industry wide demand ford said vehicles sold at a seasonally adjusted annual rate of 15 8 million unit sales for the first five months of 1996 the automaker continues to forecast 1996 total industry u s sales at 15 4 million to 15 5 million units sales for all of 1995 were 15 1 million at least one analyst welcomed the lower august industry numbers saying they might make the federal reserve board re think any possible interest rate hikes the lower the better said lehman brothers analyst joeseph phillippi maybe they ll keep the fed quiet in august ford s normally strong light truck business was hurt by a decline in government sales competitive pricing pressures and production shortages of key f 150 models f series sales inched up 1 7 percent to 58 095 explorer sales which have fallen in recent months due to the production startup of its sister the mercury mountaineer were down almost 11 percent to 27 615 on the car side contour sales sank 35 percent to 10 487 while mystique sales were down 18 percent to 5 041 taurus sales were 25 570 a 2 percent increase which brought total sales this year to 250 212 but that was not enough to top the accord which sold 251 621 cars year to date ford said it has scheduled a nearly 14 percent increase in fourth quarter north american truck production to 632 000 units to meet expected future demand for its popular f series car production is scheduled to fall 4 percent to 431 000 for the same period total fourth quarter north american output is forecast at 1 063 000 an increase of about 5 percent from the fourth quarter of 1995 on wednesday general motors corp said total car and truck sales fell 7 9 percent led by a nearly 14 percent drop in passenger car sales chrysler corp was the only one of the big three to post a sales increase it reported earlier this week that sales rose 9 2 percent helped by a strong performance from minivans sport utilities and pickup trucks
Doc 22
Workers striking two Johnson Control Inc. seat assembly plants Tuesday scored a major victory when Ford Motor Co. said it would refuse to accept non-union made seats until the dispute is resolved.
"We had a huge, huge victory here today," Bob King, director of United Auto Worker Region 1A, told a boisterous crowd of strikers and supporters outside of the plant in Plymouth, Mich., a suburb west of Detroit.
More than 300 workers at the plant walked off the job at 6 a.m. Tuesday after talks on a new contract broke down late Monday. The strike drew hundreds of other chanting supporters.
About 200 employees of a Johnson Controls seat plant in Oberlin, Ohio, also struck the company when their talks collapsed. Workers at both plants agreed last fall to be represented by the UAW in a new labour contract.
The Plymouth plant provides final assembly for seats that go into Ford's hot-selling Expedition full-size sport utility vehicle, which is made at the nearby Michigan Truck plant in Wayne, Mich. The Ohio plant makes seats for Ford's Econoline full-size vans.
Johnson Controls officials did not return telephone calls. In a statement, the company said it will make "every effort" to continue seat production at both plants, including hiring temporary and permanent replacement workers, if necessary.
Representatives from Ford said they had to consider their own union workforces when they were affected by supplier disputes. Ford is generally regarded as having the best labour relations of Detroit's Big Three.
"We're not accepting seats made by the non-union employees of Johnson Controls," said Ford spokesman Bill Carroll.
As of midday Tuesday, no new talks were scheduled.
UAW spokesman Karl Mantyla said the union was seeking wage parity with other seat suppliers, such as Lear Corp. which pays hourly wages of $14 to $16. Mantyla would not say what Johnson offered, but said the company "did not get close to that."
The UAW is also pressing for resolution of unfair labour practice claims. After workers agreed to be represented by the UAW, Mantyla said Johnson dropped its entry pay rate to $9 an hour from $9.50, cut out a 401(k) retirement plan, and barred union supporters from displaying UAW buttons at company meetings.
In its statement, the company said the UAW rejected what Johnson termed a reasonable and fair offer.
workers striking two johnson control inc seat assembly plants tuesday scored a major victory when ford motor co said it would refuse to accept non union made seats until the dispute is resolved we had a huge huge victory here today bob king director of united auto worker region 1a told a boisterous crowd of strikers and supporters outside of the plant in plymouth mich a suburb west of detroit more than 300 workers at the plant walked off the job at 6 a m tuesday after talks on a new contract broke down late monday the strike drew hundreds of other chanting supporters about 200 employees of a johnson controls seat plant in oberlin ohio also struck the company when their talks collapsed workers at both plants agreed last fall to be represented by the uaw in a new labour contract the plymouth plant provides final assembly for seats that go into ford s hot selling expedition full size sport utility vehicle which is made at the nearby michigan truck plant in wayne mich the ohio plant makes seats for ford s econoline full size vans johnson controls officials did not return telephone calls in a statement the company said it will make every effort to continue seat production at both plants including hiring temporary and permanent replacement workers if necessary representatives from ford said they had to consider their own union workforces when they were affected by supplier disputes ford is generally regarded as having the best labour relations of detroit s big three we re not accepting seats made by the non union employees of johnson controls said ford spokesman bill carroll as of midday tuesday no new talks were scheduled uaw spokesman karl mantyla said the union was seeking wage parity with other seat suppliers such as lear corp which pays hourly wages of 14 to 16 mantyla would not say what johnson offered but said the company did not get close to that the uaw is also pressing for resolution of unfair labour practice claims after workers agreed to be represented by the uaw mantyla said johnson dropped its entry pay rate to 9 an hour from 9 50 cut out a 401 k retirement plan and barred union supporters from displaying uaw buttons at company meetings in its statement the company said the uaw rejected what johnson termed a reasonable and fair offer
Doc 23
Federal-Mogul Corp unveiled a massive restructuring Thursday that dumps its four-year effort to build a global auto parts retail empire and returns the firm to its core manufacturing and distribution business.
The Southfield, Mich.-based auto supply firm said it will take a total of $264 million in pre-tax charges to cover the restructuring and special one-time items from the fourth quarter. Investors approved of the action, pushing the stock up $1.50 to $25 a share.
Nicholas Colas, an analyst at CS First Boston, said the move is a prudent one for the company, which had no in-house retail expertise when it began to expand in that area.
"Basically, the grand vision of having an international third world distribution and retail business is gone," he said. "This is much more playing to the company's historical strengths."
The moves mark a reversal of the efforts by former chairman and chief executive officer Dennis Gormley, who was forced to resign in September after pressure from the board.
Gormley spent about $500 million on acquisitions since 1992, although a company spokeswoman said less than one-third of that was related to the international retail expansion.
"Our retail operations are good viable businesses that can be operated better by someone else," said Federal-Mogul Chairman and Chief Executive Officer Dick Snell, who announced the restructuring 95 days after he assumed the company's top post.
Snell was formerly the CEO of Tenneco Inc's automotive unit. He said in a statement there will be further restructuring that will generate positive cash flow, adding the company expects a "positive economic value added" by 1998.
Colas said future restructuring charges will range from $5 million to $7 million in the next couple of years. He said Snell told analysts Federal-Mogul has a goal of nine to 10 percent return on capital by the end of 1997, and 12 percent by the end of 1998.
"The guiding light at this company has shifted from trying to create earnings growth to creating shareholder value," said Colas.
Federal-Mogul, which had $2.03 billion in 1996 sales, also said it will slash about 2,900 jobs, equal to 18.5 percent of its worldwide workforce of 15,700. The charges resulted in a net loss of $220.2 million for the fourth quarter, compared to a loss of $49.1 million for the 1995 period.
The company makes a broad range of products, ranging from engine bearings, oil seals and pistons to lighting and electrical components, for the auto, farm and construction vehicle industry.
federal mogul corp unveiled a massive restructuring thursday that dumps its four year effort to build a global auto parts retail empire and returns the firm to its core manufacturing and distribution business the southfield mich based auto supply firm said it will take a total of 264 million in pre tax charges to cover the restructuring and special one time items from the fourth quarter investors approved of the action pushing the stock up 1 50 to 25 a share nicholas colas an analyst at cs first boston said the move is a prudent one for the company which had no in house retail expertise when it began to expand in that area basically the grand vision of having an international third world distribution and retail business is gone he said this is much more playing to the company s historical strengths the moves mark a reversal of the efforts by former chairman and chief executive officer dennis gormley who was forced to resign in september after pressure from the board gormley spent about 500 million on acquisitions since 1992 although a company spokeswoman said less than one third of that was related to the international retail expansion our retail operations are good viable businesses that can be operated better by someone else said federal mogul chairman and chief executive officer dick snell who announced the restructuring 95 days after he assumed the company s top post snell was formerly the ceo of tenneco inc s automotive unit he said in a statement there will be further restructuring that will generate positive cash flow adding the company expects a positive economic value added by 1998 colas said future restructuring charges will range from 5 million to 7 million in the next couple of years he said snell told analysts federal mogul has a goal of nine to 10 percent return on capital by the end of 1997 and 12 percent by the end of 1998 the guiding light at this company has shifted from trying to create earnings growth to creating shareholder value said colas federal mogul which had 2 03 billion in 1996 sales also said it will slash about 2 900 jobs equal to 18 5 percent of its worldwide workforce of 15 700 the charges resulted in a net loss of 220 2 million for the fourth quarter compared to a loss of 49 1 million for the 1995 period the company makes a broad range of products ranging from engine bearings oil seals and pistons to lighting and electrical components for the auto farm and construction vehicle industry
Doc 24
Marathon labor contract talks dragged Saturday at a key auto supplier, with some progress being reported in a bid to avoid a strike that would quickly halt light truck production at General Motors Corp.
Bargainers for American Axle & Manufacturing Inc and the United Auto Workers (UAW) had been talking for 35 hours straight as of 5 p.m. Saturday, seeking to hammer out terms for a new three-year contract that would cover 7,200 hourly workers.
A midnight Friday strike deadline set by the UAW expired without any picket action. Union members remained on the job Saturday, as the company proceeded with its normal weekend operations of limited production and maintenance work.
"There is progress," said a person familiar with the talks who asked not to be named. "The attitudes are good."
A strike at American Axle's five plants in Detroit, Three Rivers, Mich., and Buffalo, N.Y., would shut down light truck production at GM's 11 North American truck plants within days, and create more supplier hardships for Ford Motor Co.
American Axle, which was spun off from GM in 1994, supplies rear axles for GM's pickup trucks and sport utility vehicles, axles for the Camero and Firebird rear-drive cars, as well as various parts for other passenger car lines.
The company makes axle shafts that are used by Ford in its F-150 pickup trucks, Expedition and Explorer sport/utilities and some rear-drive passenger cars, although inventories of those supplies are not as critical as the GM parts. It also makes axles for a small number of Chrysler Corp. light truck products.
Tight inventories among axle suppliers means GM's light truck plants would run out of parts by early next week, analysts said. The world's largest automaker could lose after-tax profits of $20 million a day if it were forced to suspend light truck production, analysts said.
American Axle and the UAW are at odds over wages and other economic issues as the union seeks to impose on the company the same pattern contract the Big Three automakers agreed to for about 400,000 UAW members last fall.
Automakers guaranteed jobs for 95 percent of their current workforce in a contract that provides $2,000 lump sum payments in the first year and wage hikes of three percent in the second and third years. The pact allows automakers to pay new hires at 70 percent of the starting base hourly wage of about $19.
American Axle, however, wants to start new hires at a lower rate and extend the time it takes to reach the full rate to six years, union officials said. The Big Three pact has a "grow- in" rate of three years.
But if the company were forced to match the Big Three pattern it would be at a severe cost disadvantage against its competitors, a company spokesman has said.
The American Axle talks have drawn attention because they mark the first time a GM spin-off has had to negotiate a new contract.
Meantime, a UAW strike against Johnson Controls Inc, a key seat supplier for Ford, entered its 19th day Saturday with no settlement.
marathon labor contract talks dragged saturday at a key auto supplier with some progress being reported in a bid to avoid a strike that would quickly halt light truck production at general motors corp bargainers for american axle amp manufacturing inc and the united auto workers uaw had been talking for 35 hours straight as of 5 p m saturday seeking to hammer out terms for a new three year contract that would cover 7 200 hourly workers a midnight friday strike deadline set by the uaw expired without any picket action union members remained on the job saturday as the company proceeded with its normal weekend operations of limited production and maintenance work there is progress said a person familiar with the talks who asked not to be named the attitudes are good a strike at american axle s five plants in detroit three rivers mich and buffalo n y would shut down light truck production at gm s 11 north american truck plants within days and create more supplier hardships for ford motor co american axle which was spun off from gm in 1994 supplies rear axles for gm s pickup trucks and sport utility vehicles axles for the camero and firebird rear drive cars as well as various parts for other passenger car lines the company makes axle shafts that are used by ford in its f 150 pickup trucks expedition and explorer sport utilities and some rear drive passenger cars although inventories of those supplies are not as critical as the gm parts it also makes axles for a small number of chrysler corp light truck products tight inventories among axle suppliers means gm s light truck plants would run out of parts by early next week analysts said the world s largest automaker could lose after tax profits of 20 million a day if it were forced to suspend light truck production analysts said american axle and the uaw are at odds over wages and other economic issues as the union seeks to impose on the company the same pattern contract the big three automakers agreed to for about 400 000 uaw members last fall automakers guaranteed jobs for 95 percent of their current workforce in a contract that provides 2 000 lump sum payments in the first year and wage hikes of three percent in the second and third years the pact allows automakers to pay new hires at 70 percent of the starting base hourly wage of about 19 american axle however wants to start new hires at a lower rate and extend the time it takes to reach the full rate to six years union officials said the big three pact has a grow in rate of three years but if the company were forced to match the big three pattern it would be at a severe cost disadvantage against its competitors a company spokesman has said the american axle talks have drawn attention because they mark the first time a gm spin off has had to negotiate a new contract meantime a uaw strike against johnson controls inc a key seat supplier for ford entered its 19th day saturday with no settlement
Doc 25
The head of General Motors Corp.'s Chevrolet Division said Monday he wants customers to be able to buy a new car or truck in 90 minutes -- down from the six to eight hours it often takes today.
Chevrolet also plans to expand a pilot program called Custom XPress Delivery, whereby buyers of popularly configured Blazers can receive the sport/utility vehicle one day after they sign the papers.
"Customers shouldn't have to wait six to eight weeks to take delivery on a new vehicle with the color and options they want," said John Middlebrook, general manager of Chevrolet, GM's largest single division.
The changes are part of a series of what Chevrolet calls "Brand Critical Standards" the division plans to roll out on a national level this year.
"Today, building a quality product is just the price of entry," Middlebrook said in a speech at the Automotive News World Congress here. "Dealership experiences set us apart and help make the difference between winning and losing a loyal customer."
Middlebrook predicted that changes to the distribution system, dealership culture and retail process will be the industry's dominant focus into the 21st century.
Driving the changes are customer demands for better service and better treatment from the existing new car sales process, one he said has not changed in more than 80 years.
He cited the rapid rise of new companies such as Car Max and AutoNation. Often called "Big Box" retailers, the new stores offer a wide selection of certified used cars, as well as new cars, at no-haggle prices.
"The bottom line is that customers' expectations are changing and will continue to drive change into the retail sales process for automobiles," he said.
Another area Chevrolet wants dealers to change is the selling process itself. Many sales representatives now spend 20 percent of their time helping a customer settle on a new vehicle, and 80 percent negotiating over the price. Chevrolet wants those numbers reversed.
"Our stores have to convey an image that is consistent with the Chevrolet brand. Customers should feel genuine trust when they walk into a Chevrolet dealership," he said.
Chevrolet is continuing its plan to reduce the number of dealerships. Eventually, the division wants 4,000 in the United States instead of the current 4,400, said Middlebrook.
Talking to reporters later, Middlebrook said dealers should have "good availabitity" of Chevrolet's new Venture minivan when advertising begins in February or March. However, he warned that overall inventories will be tight.
"We're going to be short because I think demand will exceed supply," he said, adding that Chevrolet plans to make and sell 70,000 to 75,000 of the new minivans in 1997.
Despite flat total U.S. minivan sales during the last several months, Middlebrook predicted the segment will grow 25 percent over the next five years as buyers from more demographic groups need the practicality they offer.
"As you look at the minivans and their acceptibility, it's across the total age spectrum. We're seeing more and more retirees in a minivan when they retire," he said. "Minivans are going across the entire market spectrum -- much like station wagons used to."
Middlebrook said segment leader Chrysler Corp. remains the GM's top competitor in the minivan market. In addition to GM, Toyota Motor Corp. will enter the market with a new front-wheel drive product called the Sienna in the fall.
Last week, Toyota executives said they expect to sell all of the 50,000 to 60,000 Sienna's they can produce in the first model year it is on the market.
the head of general motors corp s chevrolet division said monday he wants customers to be able to buy a new car or truck in 90 minutes down from the six to eight hours it often takes today chevrolet also plans to expand a pilot program called custom xpress delivery whereby buyers of popularly configured blazers can receive the sport utility vehicle one day after they sign the papers customers shouldn t have to wait six to eight weeks to take delivery on a new vehicle with the color and options they want said john middlebrook general manager of chevrolet gm s largest single division the changes are part of a series of what chevrolet calls brand critical standards the division plans to roll out on a national level this year today building a quality product is just the price of entry middlebrook said in a speech at the automotive news world congress here dealership experiences set us apart and help make the difference between winning and losing a loyal customer middlebrook predicted that changes to the distribution system dealership culture and retail process will be the industry s dominant focus into the 21st century driving the changes are customer demands for better service and better treatment from the existing new car sales process one he said has not changed in more than 80 years he cited the rapid rise of new companies such as car max and autonation often called big box retailers the new stores offer a wide selection of certified used cars as well as new cars at no haggle prices the bottom line is that customers expectations are changing and will continue to drive change into the retail sales process for automobiles he said another area chevrolet wants dealers to change is the selling process itself many sales representatives now spend 20 percent of their time helping a customer settle on a new vehicle and 80 percent negotiating over the price chevrolet wants those numbers reversed our stores have to convey an image that is consistent with the chevrolet brand customers should feel genuine trust when they walk into a chevrolet dealership he said chevrolet is continuing its plan to reduce the number of dealerships eventually the division wants 4 000 in the united states instead of the current 4 400 said middlebrook talking to reporters later middlebrook said dealers should have good availabitity of chevrolet s new venture minivan when advertising begins in february or march however he warned that overall inventories will be tight we re going to be short because i think demand will exceed supply he said adding that chevrolet plans to make and sell 70 000 to 75 000 of the new minivans in 1997 despite flat total u s minivan sales during the last several months middlebrook predicted the segment will grow 25 percent over the next five years as buyers from more demographic groups need the practicality they offer as you look at the minivans and their acceptibility it s across the total age spectrum we re seeing more and more retirees in a minivan when they retire he said minivans are going across the entire market spectrum much like station wagons used to middlebrook said segment leader chrysler corp remains the gm s top competitor in the minivan market in addition to gm toyota motor corp will enter the market with a new front wheel drive product called the sienna in the fall last week toyota executives said they expect to sell all of the 50 000 to 60 000 sienna s they can produce in the first model year it is on the market
Doc 26
Talks aimed at averting a potentially crippling auto supplier strike at American Axle & Manufacturing Inc continued on Saturday morning after bargainers worked past the midnight Friday deadline.
"The folks are still there, they worked through the night," said a person close to the negotiations who asked not to be named. "They seem in good spirits."
A strike at American Axle would virtually shut down light truck production at General Motors Corp's 11 North American truck plants within days, and create more supply hardships for Ford Motor Co.
United Auto Workers leaders have not officially extended the strike deadline, but they also have not authorized members to start picketing, union members said on Saturday.
About 7,200 UAW members were poised to walk off their jobs at five plants in Detroit, Three Rivers, Mich., and Buffalo, N.Y., on Friday night if no agreement was reached on a new three-year contract.
American Axle, which was spun off from GM in 1994, supplies rear axles for GM's pickup trucks and sport utility vehicles, axles for the Camero and Firebird rear-drive cars, as well as various parts for other passenger car lines.
The company makes axle shafts that are used by Ford in its F-150 pickup trucks, Expedition and Explorer sport/utilities and some rear-drive passenger cars, although those supplies are not as critical as the GM parts. It also makes axles for a small number of Chrysler Corp. light truck products.
Tight inventories among axle suppliers means GM's light truck plants would run out of parts by early next week, analysts said. The world's largest automaker could lose after-tax profits of $20 million a day if it were forced to suspend light truck production, analysts said.
American Axle and the UAW are at odds over wages and other economic issues as the union seeks to impose on the company the same pattern contract the Big Three automakers agreed to for about 400,000 UAW members last fall.
Automakers guaranteed jobs for 95 percent of their current workforce in a contract that provides $2,000 lump sum payments in the first year and wage hikes of three percent in the second and third years. The pact allows automakers to pay new hires at 70 percent of the starting base hourly wage of about $19.
American Axle, however, wants to start new hires at 60 percent of the base wage -- and extend the time it takes to reach the full rate to six years, union officials said. The Big Three pact has a "grow-in" rate of three years.
But if the company were forced to match the Big Three pattern it would be at a severe cost disadvantage against its competitors, a company spokesman has said.
The American Axle talks have drawn attention because they mark the first time a GM spin-off has had to negotiate a new contract.
Meantime, a UAW strike against Johnson Controls Inc, a key seat supplier for Ford, entered its 19th day Saturday with no settlement.
talks aimed at averting a potentially crippling auto supplier strike at american axle amp manufacturing inc continued on saturday morning after bargainers worked past the midnight friday deadline the folks are still there they worked through the night said a person close to the negotiations who asked not to be named they seem in good spirits a strike at american axle would virtually shut down light truck production at general motors corp s 11 north american truck plants within days and create more supply hardships for ford motor co united auto workers leaders have not officially extended the strike deadline but they also have not authorized members to start picketing union members said on saturday about 7 200 uaw members were poised to walk off their jobs at five plants in detroit three rivers mich and buffalo n y on friday night if no agreement was reached on a new three year contract american axle which was spun off from gm in 1994 supplies rear axles for gm s pickup trucks and sport utility vehicles axles for the camero and firebird rear drive cars as well as various parts for other passenger car lines the company makes axle shafts that are used by ford in its f 150 pickup trucks expedition and explorer sport utilities and some rear drive passenger cars although those supplies are not as critical as the gm parts it also makes axles for a small number of chrysler corp light truck products tight inventories among axle suppliers means gm s light truck plants would run out of parts by early next week analysts said the world s largest automaker could lose after tax profits of 20 million a day if it were forced to suspend light truck production analysts said american axle and the uaw are at odds over wages and other economic issues as the union seeks to impose on the company the same pattern contract the big three automakers agreed to for about 400 000 uaw members last fall automakers guaranteed jobs for 95 percent of their current workforce in a contract that provides 2 000 lump sum payments in the first year and wage hikes of three percent in the second and third years the pact allows automakers to pay new hires at 70 percent of the starting base hourly wage of about 19 american axle however wants to start new hires at 60 percent of the base wage and extend the time it takes to reach the full rate to six years union officials said the big three pact has a grow in rate of three years but if the company were forced to match the big three pattern it would be at a severe cost disadvantage against its competitors a company spokesman has said the american axle talks have drawn attention because they mark the first time a gm spin off has had to negotiate a new contract meantime a uaw strike against johnson controls inc a key seat supplier for ford entered its 19th day saturday with no settlement
Doc 27
As megadealer H. Wayne Huizenga continued to gobble up more new car franchises Monday, the National Automobile Dealers Association's top economist said traditional dealers are poised to grab more of the used vehicle market and exploit their superior parts service.
"All in all, we have a pretty favourable outlook in terms of our industry," Tom Webb, chief economist of NADA, told a news conference at the group's annual convention.
Webb's comments came hours after Huizenga's Republic Industries Inc. announced the purchase of Wallace Automotive Group, a six-dealer group that operates Ford, Nissan, Dodge, Mitsubishi and two Lincoln-Mercury dealerships in southeast Florida.
The deal, valued at $55 million, pushes Republic's total 1997 new dealer revenue estimates for 1997 to about $2.8 billion, a Republic spokesman said, erasing any doubt that Republic is now the largest new vehicle dealer group in the country in terms of revenues.
In a swipe at the superstore trend, Webb disputed the idea that selling large volumes of new or used vehicles will cut more costs or generate higher profits. One analysis conducted by NADA showed economies of scale benefits stop after 100 vehicles a month.
"People who think that just increasing volume is the answer are totally wrong," he said.
The new car market remains a mature one, Webb said, with average 1996 dealer profits per vehicle at about $40. The used vehicle segment is growing twice as quickly, he said, because franchisers are picking up more business from small, less-sophisticated used car operators, as well as people who no longer prefer trying to sell a car or truck themselves.
Traditional dealers now control about 31 percent of used retail unit sales and have a 50 percent share of the market in terms of revenue dollars, said Webb. Retail sales of used vehicles number between 40 million and 45 million a year, he said.
"I think the franchised dealer share will grow," he said.
Webb also believes franchised dealers can make gains with their parts and service operations, which he said consistently receive high quality rankings.
Webb said traditional dealers have an inherent advantage over superstores structured like CarMax, a unit of Circuit Cities Stores Inc. , because they have more than one profit centre. The CarMax chain now only makes money from one area -- used cars, according to Webb. But franchised dealers make money off used cars, parts and financing.
Franchised dealers have also benefited from growth in lending to higher-risk buyers. Even if those loans later become delinquent, it is not the dealer's problem, as he or she has already made money from the sale, Webb said.
He said he is not concerned about consumer debt levels hurting vehicle sales. Although some industry experts believe the overall selling cycle is becoming more stable, he said the industry still remains vulnerable to a downturn in the economy.
"A new vehicle is a very postponeable purchase," said Webb. "So if the economy weakens, yes, we will suffer."
For 1997, NADA predicts there will be a net loss of 100 to 150 dealerships, continuing a gradual consolidation that has been under way since the 1940s. According to NADA, there were 22,000 new vehicle dealers in 1996, more than 50,000 franchises and about 15,000 dealer principals.
as megadealer h wayne huizenga continued to gobble up more new car franchises monday the national automobile dealers association s top economist said traditional dealers are poised to grab more of the used vehicle market and exploit their superior parts service all in all we have a pretty favourable outlook in terms of our industry tom webb chief economist of nada told a news conference at the group s annual convention webb s comments came hours after huizenga s republic industries inc announced the purchase of wallace automotive group a six dealer group that operates ford nissan dodge mitsubishi and two lincoln mercury dealerships in southeast florida the deal valued at 55 million pushes republic s total 1997 new dealer revenue estimates for 1997 to about 2 8 billion a republic spokesman said erasing any doubt that republic is now the largest new vehicle dealer group in the country in terms of revenues in a swipe at the superstore trend webb disputed the idea that selling large volumes of new or used vehicles will cut more costs or generate higher profits one analysis conducted by nada showed economies of scale benefits stop after 100 vehicles a month people who think that just increasing volume is the answer are totally wrong he said the new car market remains a mature one webb said with average 1996 dealer profits per vehicle at about 40 the used vehicle segment is growing twice as quickly he said because franchisers are picking up more business from small less sophisticated used car operators as well as people who no longer prefer trying to sell a car or truck themselves traditional dealers now control about 31 percent of used retail unit sales and have a 50 percent share of the market in terms of revenue dollars said webb retail sales of used vehicles number between 40 million and 45 million a year he said i think the franchised dealer share will grow he said webb also believes franchised dealers can make gains with their parts and service operations which he said consistently receive high quality rankings webb said traditional dealers have an inherent advantage over superstores structured like carmax a unit of circuit cities stores inc because they have more than one profit centre the carmax chain now only makes money from one area used cars according to webb but franchised dealers make money off used cars parts and financing franchised dealers have also benefited from growth in lending to higher risk buyers even if those loans later become delinquent it is not the dealer s problem as he or she has already made money from the sale webb said he said he is not concerned about consumer debt levels hurting vehicle sales although some industry experts believe the overall selling cycle is becoming more stable he said the industry still remains vulnerable to a downturn in the economy a new vehicle is a very postponeable purchase said webb so if the economy weakens yes we will suffer for 1997 nada predicts there will be a net loss of 100 to 150 dealerships continuing a gradual consolidation that has been under way since the 1940s according to nada there were 22 000 new vehicle dealers in 1996 more than 50 000 franchises and about 15 000 dealer principals
Doc 28
Amid a landscaped backdrop of bird calls, trees and a waterfall, Ford Motor Co. this week showed off a concept coupe with extra side doors, adjustable pedals and telescoping dashboard gauges.
Not far from Ford's display at the North American International Auto Show, Pontiac premiered the "Rageous." Another two-door concept car, or one-of-a-kind show car, the Rageous has enough room to carry a four-by-eight foot sheet of plywood when the tailgate is down. It even has a driver's side door compartment big enough to safely hold your pistol.
Extra doors. Larger trunks. Cupholders that warm up and cool down. It's a practical world out there, and automakers have gotten the message.
A walk around the show, which opens to the public on Saturday, turns up cars, sport/utility vehicles, pickup trucks and minivans with a raft of new features designed to make your vehicle as handy as can be.
The new Chevrolet Corvette has undergone structural changes that make it easier to climb into the low-slung sports car. Designers have added more than 12 cubic feet of cargo room -- enough to fit two sets of golf clubs into the trunk.
Volkswagen is testing the waters with a new two-door concept car called the Coupe CJ. Designed specifically for the American market, the car can seat four people comfortably. The trunk has nearly 15 cubic feet.
Chrysler Corp. is showing the Dakar, a concept version of its popular Jeep Wrangler that has four doors. It is just one of several new types of sport/utilities that automakers are displaying as they seek to carve up the fast-growing market into even smaller niches.
One of the more extreme sport/utility concepts is the Open View from Wilhelm Karmann GmbH, an auto industry supplier from Osnabrueck, Germany. Built off a Ford Explorer platform, the Open View has a retractable roof system that essentially turns the vehicle into a convertible sport/utility.
Perhaps the best example of burgeoning practicality is Ford's Mercury MC4 concept. Designed as a coupe, the car has two half doors that open to the rear. Access to the trunk is provided by two "gull-wing" lids that provide more loading versatility.
On the inside, drivers can adjust the sculpted seats, pedals and instrument gauges to fit their individual needs. The centre console has a pop-up screen, and there is an integrated child seat in the back.
"The MC4 is designed with the needs of today's diverse and active lifestyles in mind and shows that sports coupes can be practical when it comes to carrying passengers and their belongings in comfort," said Jack Telnack, vice president of corporate design at Ford.
Although the MC4 is not likely to ever see a dealer's showroom, Ford Automotive Operations President Jacques Nasser said some of the mechanical features are already being incorporated into future Ford vehicles.
Whether it's more head room or extra power outlets for cellular phones, the new features signal the struggle among automakers to get whatever kind of competitive edge they can, said David Cole, director of the University of Michigan's Centre for the Study of Automotive Transportation.
Gone are the days when there were vast quality differences between Japanese and domestic cars, he said. Now, automakers must find new ways to differentiate themseves from the increasing number of models in the market.
"What they're trying to do is get any kind of competitive advantage they can find," he said.
amid a landscaped backdrop of bird calls trees and a waterfall ford motor co this week showed off a concept coupe with extra side doors adjustable pedals and telescoping dashboard gauges not far from ford s display at the north american international auto show pontiac premiered the rageous another two door concept car or one of a kind show car the rageous has enough room to carry a four by eight foot sheet of plywood when the tailgate is down it even has a driver s side door compartment big enough to safely hold your pistol extra doors larger trunks cupholders that warm up and cool down it s a practical world out there and automakers have gotten the message a walk around the show which opens to the public on saturday turns up cars sport utility vehicles pickup trucks and minivans with a raft of new features designed to make your vehicle as handy as can be the new chevrolet corvette has undergone structural changes that make it easier to climb into the low slung sports car designers have added more than 12 cubic feet of cargo room enough to fit two sets of golf clubs into the trunk volkswagen is testing the waters with a new two door concept car called the coupe cj designed specifically for the american market the car can seat four people comfortably the trunk has nearly 15 cubic feet chrysler corp is showing the dakar a concept version of its popular jeep wrangler that has four doors it is just one of several new types of sport utilities that automakers are displaying as they seek to carve up the fast growing market into even smaller niches one of the more extreme sport utility concepts is the open view from wilhelm karmann gmbh an auto industry supplier from osnabrueck germany built off a ford explorer platform the open view has a retractable roof system that essentially turns the vehicle into a convertible sport utility perhaps the best example of burgeoning practicality is ford s mercury mc4 concept designed as a coupe the car has two half doors that open to the rear access to the trunk is provided by two gull wing lids that provide more loading versatility on the inside drivers can adjust the sculpted seats pedals and instrument gauges to fit their individual needs the centre console has a pop up screen and there is an integrated child seat in the back the mc4 is designed with the needs of today s diverse and active lifestyles in mind and shows that sports coupes can be practical when it comes to carrying passengers and their belongings in comfort said jack telnack vice president of corporate design at ford although the mc4 is not likely to ever see a dealer s showroom ford automotive operations president jacques nasser said some of the mechanical features are already being incorporated into future ford vehicles whether it s more head room or extra power outlets for cellular phones the new features signal the struggle among automakers to get whatever kind of competitive edge they can said david cole director of the university of michigan s centre for the study of automotive transportation gone are the days when there were vast quality differences between japanese and domestic cars he said now automakers must find new ways to differentiate themseves from the increasing number of models in the market what they re trying to do is get any kind of competitive advantage they can find he said
Doc 29
After 19 months of sometimes violent confrontations, six striking newspaper unions on Friday made an unconditional offer to return to work at Detroit's two major daily papers.
Al Derey, head of the Metropolitan Council of Newspaper Unions, said the action was not an act of surrender but a tactic to expose the papers to potentially huge financial losses if they do not agree to a fair contract.
"Our position is this strike has not ended. This is simply a new strategy to try to win a fair and decent contract from two corporate giants that don't have any souls," a visibly emotional Derey told a news conference.
About 2,500 distribution, pressroom, newsroom and mailroom workers walked off their jobs at the Detroit Free Press and Detroit News in July 1995 after contract talks collapsed.
The papers are editorially indepdendent and have separate owners but have been published under a joint operating agreement since 1989.
Knight-Ridder Inc. owns the Free Press. The News is owned by Gannett Co. Inc..
A representative from Detroit Newspapers Inc, the joint operating agency, could not be reached for comment.
The papers have published every day since the strike began, although early on they only published a single joint edition. More than 400 of the original strikers have cross picket lines. The papers have hired about 1,400 replacements.
Since the start of the strike, which has often erupted in violent confrontations between supporters and private security guards, circulation at the papers has fallen 30 percent. Advertising revenues are down between 15 percent and 20 percent.
Derey told reporters the advertising boycott has cost the papers a combined $250 million, and 700,000 readers have dropped subscriptions. But because the newspapers "still don't get it," he said the unions need to adopt a new strategy.
If the papers reject the return-to-work offer, they could be liable for back pay from the time the offer was made if they were found to have commited unfair labor practices, said Derey. That amounts to $250,000 a day, or $1 million a year, he said.
The action Friday is a controversial one for many union members, who are staunchly opposed to returning to work. But Derey appealed for their support.
"This wasn't the only strategy and it isn't the easiest, but it is the best way we've got to take on these corporate powers and get us moving again down the road to a fair contract," he said.
One local labor analyst said the union's move was an acknowledgement the strike as a means of leverage has reached the point of diminishing returns. But it does force management to make some difficult decisions.
"What the unions are doing now is upping the legal ante," said Steve Babson, labor program specialist at Wayne State University's Labor Studies Center.
If the papers do not agree to take back all of the striking workers, they could be liable for the back pay penalities if they commited unfair labor practices, a legal process that could take years to resolve, he said.
The Detroit regional director of the NLRB has accused the companies of unfair labor practices, finding they did not bargain in good faith. The company appealed that decision to an administrative law judge, who has not yet issued a ruling.
after 19 months of sometimes violent confrontations six striking newspaper unions on friday made an unconditional offer to return to work at detroit s two major daily papers al derey head of the metropolitan council of newspaper unions said the action was not an act of surrender but a tactic to expose the papers to potentially huge financial losses if they do not agree to a fair contract our position is this strike has not ended this is simply a new strategy to try to win a fair and decent contract from two corporate giants that don t have any souls a visibly emotional derey told a news conference about 2 500 distribution pressroom newsroom and mailroom workers walked off their jobs at the detroit free press and detroit news in july 1995 after contract talks collapsed the papers are editorially indepdendent and have separate owners but have been published under a joint operating agreement since 1989 knight ridder inc owns the free press the news is owned by gannett co inc a representative from detroit newspapers inc the joint operating agency could not be reached for comment the papers have published every day since the strike began although early on they only published a single joint edition more than 400 of the original strikers have cross picket lines the papers have hired about 1 400 replacements since the start of the strike which has often erupted in violent confrontations between supporters and private security guards circulation at the papers has fallen 30 percent advertising revenues are down between 15 percent and 20 percent derey told reporters the advertising boycott has cost the papers a combined 250 million and 700 000 readers have dropped subscriptions but because the newspapers still don t get it he said the unions need to adopt a new strategy if the papers reject the return to work offer they could be liable for back pay from the time the offer was made if they were found to have commited unfair labor practices said derey that amounts to 250 000 a day or 1 million a year he said the action friday is a controversial one for many union members who are staunchly opposed to returning to work but derey appealed for their support this wasn t the only strategy and it isn t the easiest but it is the best way we ve got to take on these corporate powers and get us moving again down the road to a fair contract he said one local labor analyst said the union s move was an acknowledgement the strike as a means of leverage has reached the point of diminishing returns but it does force management to make some difficult decisions what the unions are doing now is upping the legal ante said steve babson labor program specialist at wayne state university s labor studies center if the papers do not agree to take back all of the striking workers they could be liable for the back pay penalities if they commited unfair labor practices a legal process that could take years to resolve he said the detroit regional director of the nlrb has accused the companies of unfair labor practices finding they did not bargain in good faith the company appealed that decision to an administrative law judge who has not yet issued a ruling
Doc 30
Fearsome of injuries caused by deploying airbags, consumers polled by a market research firm gave safety a lower ranking when choosing a new vehicle for the first time in four years, according to a study released on Sunday.
The biggest drop came with regard to airbags, which have been linked to the deaths of dozens of children and small adults by federal safety regulators.
The number of people who gave driver and passenger side air bags a very important or important rating fell to 57 percent from 82 percent the previous year, according to the report conducted by the Dohring Co. Inc., a Glendale, Calif.-based market research firm.
Respondents who said those air bags are "not at all important" in their purchase decision jumped to 24 percent from 6 percent.
"No doubt the safety reports of physical injury have contributed to this," Rik Kinney, senior vice president of Dohring Co. "This is the first time since we started doing this study in 1993 that the importance of all safety-related equipment declined."
Kinney said 96 percent of those surveyed had seen or heard media reports of potential injuries from airbags. Harm to children ranked as the single biggest fear, with 45 percent of those listing that as a concern.
The study was conducted in January 1997 from a random sample of 1,253 consumers in all 50 states. The poll's margin of error is 2.8 percent.
In other findings, the Dohring study found the number of people who have purchased or will shop at a new car dealership have access to on-line information serivces was up 10 percent to 38 percent.
But the study found that 81 percent of those talked to would still want to test drive a vehicle, even if they researched it over a computer on-line service. Only 4 percent plan to use an on-line service to buy their vehicle.
The study also found that 28 percent of the respondents would rather buy their next used car from a new car dealership that has a manufacturer's certified program, vs. 15 percent who said they would go to a used car superstore.
Kinney said the study was paid for by Dohring. But he acknowledged the company receives 99 percent of its revenues from by selling research to automakers, dealer advertising associations and individual auto dealerships.
fearsome of injuries caused by deploying airbags consumers polled by a market research firm gave safety a lower ranking when choosing a new vehicle for the first time in four years according to a study released on sunday the biggest drop came with regard to airbags which have been linked to the deaths of dozens of children and small adults by federal safety regulators the number of people who gave driver and passenger side air bags a very important or important rating fell to 57 percent from 82 percent the previous year according to the report conducted by the dohring co inc a glendale calif based market research firm respondents who said those air bags are not at all important in their purchase decision jumped to 24 percent from 6 percent no doubt the safety reports of physical injury have contributed to this rik kinney senior vice president of dohring co this is the first time since we started doing this study in 1993 that the importance of all safety related equipment declined kinney said 96 percent of those surveyed had seen or heard media reports of potential injuries from airbags harm to children ranked as the single biggest fear with 45 percent of those listing that as a concern the study was conducted in january 1997 from a random sample of 1 253 consumers in all 50 states the poll s margin of error is 2 8 percent in other findings the dohring study found the number of people who have purchased or will shop at a new car dealership have access to on line information serivces was up 10 percent to 38 percent but the study found that 81 percent of those talked to would still want to test drive a vehicle even if they researched it over a computer on line service only 4 percent plan to use an on line service to buy their vehicle the study also found that 28 percent of the respondents would rather buy their next used car from a new car dealership that has a manufacturer s certified program vs 15 percent who said they would go to a used car superstore kinney said the study was paid for by dohring but he acknowledged the company receives 99 percent of its revenues from by selling research to automakers dealer advertising associations and individual auto dealerships
Doc 31
Ford Motor Co. said Wednesday profits jumped 82 percent to $1.2 billion in the fourth quarter as it rebounded from product launches that held profits down a year earlier.
Ford, the last of the Big Three Detroit automakers to report fourth-quarter results, said the earnings equalled $1 a share. The results reflected a total of $132 million in special charges, including costs related to Ford's decision to cut 3,500 jobs last year.
In the 1995 quarter, Ford earned $660 million, or 49 cents a share. Sales rose to $38.8 billion from $34.6 billion.
Excluding one-time items, Ford's fourth quarter income was $1.10 a share -- higher than the $1.02 a share forecast by analysts, according to First Call, which tracks estimates.
Although Ford appears to be making headway in cost reduction, analysts were not overly impressed, noting that sales of high-profit light truck products are booming.
"They were not great, especially in view of the fact that they are selling a lot trucks," said Maryann Keller, an analyst with Furman Selz & Co.
Ford Chairman Alex Trotman said in a statement that automotive earnings will improve in 1997, because the company has successfully completed its highest-volume launches in North America and Europe.
"We're starting 1997 in a much stronger competitive position," he said.
Trotman said Ford expects better results for all of 1997 in Europe, where the company is moving to cut costs. Ford also predicted smaller losses in South America for 1997, he added.
"Overall, we are on track," he said.
Meantime, Ford Chief Financial Officer John Devine told reporters that cost-cutting will reach new heights in 1997. For the first time, Ford expects 1997 costs to be below those of the prior year.
The fourth quarter results capped a mixed year for the automaker in which strong profits from its Financial Services Group were needed to offset a steady flow of red ink from overseas operations.
Earnings for all of 1996 rose 7 percent to $4.4 billion, or $3.65 a share, from $4.1 billion, or $3.34 in 1995. Ford's worldwide automotive operations posted net income of $1.6 billion, down from $2 billion. Financial Services earned a record $2.8 billion in 1996, up 33 percent over 1995.
Revenues for the year climbed to $147.0 billion from $137.1 billion in 1995.
Ford's core U.S. automotive operations, which contribute about 65 percent of total automotive revenues, reported profits of $628 million for the fourth quarter, compared with $168 million a year ago.
Ford continued to have problems overseas, but there were signs of progress in turning those operations around. Ford's European loss for the quarter rose to $88 million from $48 million. But excluding $127 million in severance charges in the 1996 quarter, the operating results showed a $39 million profit, versus a $26 million operating profit last year.
In South America, where Ford has struggled in the Brazilian market, the fourth quarter net loss was $287 million, compared with a $112 million loss a year ago.
"I thought the fourth quarter was an okay quarter. What was most important was improvement on the cost front," said Ronald Glantz, an analyst at Dean Witter Reynolds.
On Tuesday, General Motors Corp. said strike costs slashed fourth quarter earnings by 50 percent to $786 million. Chrysler Corp. last week said fourth quarter earnings fell to $807 million, down from $1.04 billion.
Ford's stock lost 12.5 cents to close at 32.375 on the New York Stock Exchange.
ford motor co said wednesday profits jumped 82 percent to 1 2 billion in the fourth quarter as it rebounded from product launches that held profits down a year earlier ford the last of the big three detroit automakers to report fourth quarter results said the earnings equalled 1 a share the results reflected a total of 132 million in special charges including costs related to ford s decision to cut 3 500 jobs last year in the 1995 quarter ford earned 660 million or 49 cents a share sales rose to 38 8 billion from 34 6 billion excluding one time items ford s fourth quarter income was 1 10 a share higher than the 1 02 a share forecast by analysts according to first call which tracks estimates although ford appears to be making headway in cost reduction analysts were not overly impressed noting that sales of high profit light truck products are booming they were not great especially in view of the fact that they are selling a lot trucks said maryann keller an analyst with furman selz amp co ford chairman alex trotman said in a statement that automotive earnings will improve in 1997 because the company has successfully completed its highest volume launches in north america and europe we re starting 1997 in a much stronger competitive position he said trotman said ford expects better results for all of 1997 in europe where the company is moving to cut costs ford also predicted smaller losses in south america for 1997 he added overall we are on track he said meantime ford chief financial officer john devine told reporters that cost cutting will reach new heights in 1997 for the first time ford expects 1997 costs to be below those of the prior year the fourth quarter results capped a mixed year for the automaker in which strong profits from its financial services group were needed to offset a steady flow of red ink from overseas operations earnings for all of 1996 rose 7 percent to 4 4 billion or 3 65 a share from 4 1 billion or 3 34 in 1995 ford s worldwide automotive operations posted net income of 1 6 billion down from 2 billion financial services earned a record 2 8 billion in 1996 up 33 percent over 1995 revenues for the year climbed to 147 0 billion from 137 1 billion in 1995 ford s core u s automotive operations which contribute about 65 percent of total automotive revenues reported profits of 628 million for the fourth quarter compared with 168 million a year ago ford continued to have problems overseas but there were signs of progress in turning those operations around ford s european loss for the quarter rose to 88 million from 48 million but excluding 127 million in severance charges in the 1996 quarter the operating results showed a 39 million profit versus a 26 million operating profit last year in south america where ford has struggled in the brazilian market the fourth quarter net loss was 287 million compared with a 112 million loss a year ago i thought the fourth quarter was an okay quarter what was most important was improvement on the cost front said ronald glantz an analyst at dean witter reynolds on tuesday general motors corp said strike costs slashed fourth quarter earnings by 50 percent to 786 million chrysler corp last week said fourth quarter earnings fell to 807 million down from 1 04 billion ford s stock lost 12 5 cents to close at 32 375 on the new york stock exchange
Doc 32
In what may be a break in a 15-day strike against a maker of automotive seats, negotiators for Johnson Controls Inc. and the United Auto Workers spoke for several hours late Monday and early Tuesday.
The renewed discussions came hours after Ford Motor Co. said it would re-start its Expedition production line with seats from Lear Corp., Johnson Control's chief competitor in the auto seat business.
"We're hopeful there will be some additional discussions," said JCI spokesman Jeff Steiner.
No talks were held later Tuesday, but Steiner characterised the negotiations as being adjourned, compared with previous sessions where talks broke off completely. The two sides had not spoken since late Thursday, Feb. 6.
Unable to agree on terms for a new contract, about 500 UAW members at JCI seat plants in Plymouth, Mich., and Oberlin, Ohio, walked off the job Jan. 28. In addition to the Expedition full-size sport/utility, the plants make seats for Ford's Econoline and Club Wagon full-size vans.
Ford refused to accept seats made by non-union replacement workers, but continued making vehicles in hopes the strike would be settled soon. After it made 14,800 Expeditions and Econolines without seats, Ford last Friday suspended production on three assembly lines in Michigan and Ohio, idling 6,800 workers.
The automaker reversed direction again Monday, saying it was devising plans to resume Expedition production with seats from Lear. The popular sport/utility, introduced last fall, is one of Ford's most profitable vehicles, earning what analysts estimate at $10,000 each in pre-tax profits.
The Expeditions are made only at Ford's Michigan Assembly plant in Wayne, Mich. Once production resumes, some 4,000 of the 6,800 workers idled would go back to work. The shutdown has been a costly one for Ford. In addition to losing 840 Expeditions a day, the plant has also been forced to halt production of the hot-selling F-150 pickup trucks.
Steiner confirmed that JCI has moved fabrication equipment and frame-making tools out of the Plymouth plant and into its metal seat frame plant in Cadiz, Ky. The plant, which is represented by the United Steelworkers union, is one of six JCI facilities that has union representation. Milwaukee, Wis.-based JCI has a total of 34 plants in the United States.
JCI chose the Cadiz plant because it has extra floor space to accommodate the machinery, Steiner said. Under the plan announced Monday, JCI will make frames for both Lear and Ford. Lear will produce second and third row seats for Expeditions, and Ford will make front-row seats at its Chesterfield, Mich., trim plant.
in what may be a break in a 15 day strike against a maker of automotive seats negotiators for johnson controls inc and the united auto workers spoke for several hours late monday and early tuesday the renewed discussions came hours after ford motor co said it would re start its expedition production line with seats from lear corp johnson control s chief competitor in the auto seat business we re hopeful there will be some additional discussions said jci spokesman jeff steiner no talks were held later tuesday but steiner characterised the negotiations as being adjourned compared with previous sessions where talks broke off completely the two sides had not spoken since late thursday feb 6 unable to agree on terms for a new contract about 500 uaw members at jci seat plants in plymouth mich and oberlin ohio walked off the job jan 28 in addition to the expedition full size sport utility the plants make seats for ford s econoline and club wagon full size vans ford refused to accept seats made by non union replacement workers but continued making vehicles in hopes the strike would be settled soon after it made 14 800 expeditions and econolines without seats ford last friday suspended production on three assembly lines in michigan and ohio idling 6 800 workers the automaker reversed direction again monday saying it was devising plans to resume expedition production with seats from lear the popular sport utility introduced last fall is one of ford s most profitable vehicles earning what analysts estimate at 10 000 each in pre tax profits the expeditions are made only at ford s michigan assembly plant in wayne mich once production resumes some 4 000 of the 6 800 workers idled would go back to work the shutdown has been a costly one for ford in addition to losing 840 expeditions a day the plant has also been forced to halt production of the hot selling f 150 pickup trucks steiner confirmed that jci has moved fabrication equipment and frame making tools out of the plymouth plant and into its metal seat frame plant in cadiz ky the plant which is represented by the united steelworkers union is one of six jci facilities that has union representation milwaukee wis based jci has a total of 34 plants in the united states jci chose the cadiz plant because it has extra floor space to accommodate the machinery steiner said under the plan announced monday jci will make frames for both lear and ford lear will produce second and third row seats for expeditions and ford will make front row seats at its chesterfield mich trim plant
Doc 33
United Auto Workers union bargainers continued to negotiate with American Axle Manufacturing Inc past a midnight Friday strike deadline as workers held off on putting up picket lines.
About 7,200 UAW members were poised to walk off their jobs at five plants in Detroit, Three Rivers, Mich., and Buffalo, N.Y., if no agreement was reached on a new three-year contract. A person answering the phone at UAW Local 262 in Detroit said at midnight members had not received any official word the deadline had been extended.
A strike at American Axle could cripple the company's largest customer, General Motors Corp, within days.
The two sides are at odds over wages and other economic issues as the union seeks to impose on American Axle the same pattern contract the Big Three automakers agreed to for about 400,000 UAW members last fall. Automakers guaranteed jobs for 95 percent of their current workforce in a contract that provides $2,000 lump sum payments in the first year and wage hikes of three percent in the second and third years.
American Axle, which was spun off from GM into a private company in 1994, supplies virtually all of the rear axles for GM's pickup trucks and sport utility vehicles, axles for the Camero and Firebird rear-drive cars, as well as various parts for other passenger car lines.
The company also makes axles for Chrysler Corp. and axle shafts for Ford Motor Co..
Tight inventories at American Axle and Dana Corp., the other primary axle maker in the United States, means GM's light truck plants would run out of parts by early next week, analysts said.
Burnham Securities Inc. analyst David Healy estimated GM could lose $20 million a day in after-tax profits if it was forced to suspend light truck production. Labor strife cost the world's largest automaker $1.2 billion in 1996.
The American Axle talks have drawn attention because they mark the first time a GM spinoff has had to negotiate a new contract. When the firm was spun off under former Chrysler manufacturing chief Richard Dauch, it agreed to uphold terms of the previous UAW contract, which expired last September.
Union officials have said the company is balking at following the Big Three pattern deal hammered out last fall. The contract allows automakers to pay new hires at 70 percent of the starting base hourly wage of about $19.
American Axle, however, wants to start new hires at 60 percent of the base wage -- and extend the time it takes to reach the full rate to six years. The Big Three pact has a "grow-in" rate of three years.
united auto workers union bargainers continued to negotiate with american axle manufacturing inc past a midnight friday strike deadline as workers held off on putting up picket lines about 7 200 uaw members were poised to walk off their jobs at five plants in detroit three rivers mich and buffalo n y if no agreement was reached on a new three year contract a person answering the phone at uaw local 262 in detroit said at midnight members had not received any official word the deadline had been extended a strike at american axle could cripple the company s largest customer general motors corp within days the two sides are at odds over wages and other economic issues as the union seeks to impose on american axle the same pattern contract the big three automakers agreed to for about 400 000 uaw members last fall automakers guaranteed jobs for 95 percent of their current workforce in a contract that provides 2 000 lump sum payments in the first year and wage hikes of three percent in the second and third years american axle which was spun off from gm into a private company in 1994 supplies virtually all of the rear axles for gm s pickup trucks and sport utility vehicles axles for the camero and firebird rear drive cars as well as various parts for other passenger car lines the company also makes axles for chrysler corp and axle shafts for ford motor co tight inventories at american axle and dana corp the other primary axle maker in the united states means gm s light truck plants would run out of parts by early next week analysts said burnham securities inc analyst david healy estimated gm could lose 20 million a day in after tax profits if it was forced to suspend light truck production labor strife cost the world s largest automaker 1 2 billion in 1996 the american axle talks have drawn attention because they mark the first time a gm spinoff has had to negotiate a new contract when the firm was spun off under former chrysler manufacturing chief richard dauch it agreed to uphold terms of the previous uaw contract which expired last september union officials have said the company is balking at following the big three pattern deal hammered out last fall the contract allows automakers to pay new hires at 70 percent of the starting base hourly wage of about 19 american axle however wants to start new hires at 60 percent of the base wage and extend the time it takes to reach the full rate to six years the big three pact has a grow in rate of three years
Doc 34
It is probably a good thing the National Automobile Dealers Association annual convention will not be returning any time soon to Atlanta, where the CarMax superstore has made a big splash.
Acting on a request from CarMax management, a local policeman forced three reporters out of the CarMax lot in the Atlanta suburb of Norcross, telling them people associated with the convention were banned from the store.
A momentary lapse of Southern hospitality? Hardly. The incident ranks as only one more illustration of the friction, fear and outright hostility caused by the new breed of used car superstores and mega dealers.
Although the superstores now account for only a fraction of the 40.8 million used cars sold in 1996, H. Wayne Huizenga's Republic Industries Inc. is on a relentless campaign to buy new vehicle dealerships.
Republic, which owns the AutoNation USA chain, added two more dealer groups this week, lifting estimated 1997 revenues to more than $2.8 billion, the single largest in the country.
Together, the CarMax and Republic models are taking the industry by storm, and in the process are tearing apart a system traditional franchised dealers have known for 80 years.
CarMax in particular drew a steady stream of criticism from many dealers -- and some manufacturers -- at the convention, which wrapped up earlier this week.
Yale Gieszl, the top Toyota Motor Corp. executive in the United States, blasted CarMax during a press conference, saying Toyota would not grant a new car franchise to the company.
"I don't think size is equivalent to customer service," said Gieszl, executive vice president of Toyota Motor Sales USA Inc.
Officials at CarMax returned the favour by turning down all requests for tours of the Norcross store. The outlet is unique because it is the only CarMax to have a new car franchise, from Chrysler Corp., which was granted last year.
Morgan Stewart, a spokesman for Circuit City Stores Inc., which owns 80 percent of CarMax, said there were simply too many requests to accommodate the visitors.
"We had hundreds if not thousands of people showing up, looking for tours, and we had to keep our primary commitment, which was to serve customers," he said.
As for the reporters, Stewart said they should have first contacted Circuit City's public relations department at the company's Richmond, Va., headquarters.
Although the superstores have received much attention for emphasising a more friendly sales approach, many dealers remain unconvinced they can successfuly run the business side.
Vinje Dahl, who owns Dahl Ford in Davenport, Iowa, said it is not easy to operate used car businesses profitably on a local level, where an intimate knowledge of the market is key. Profit margins are razor-thin, and a dealership is considered doing well if its return on sales is 1.5 percent to 2 percent.
"We're in a buying business, we aren't really in a selling business," he said, adding, "I don't think these guys are buying very smart."
For now, CarMax sales are booming. For January sales from stores open at least a year were up 33 percent, while total sales rose 90 percent to $43.1 million, thanks to the addition of two new superstores.
CarMax, however, is not expected to report significant profits before 1999, said Nicholas Colas, an analyst with Credit Suisse First Boston.
Despite their grousing, many of the dealers privately expressed envy and amazement at the prices Republic is paying. Profitable dealerships typically sell for three to five times earnings, dealers said, but Republic is paying for dealer groups in stock that value the deals at 17 to 20 times earnings.
Colas said the fact the deals are for stock and not cash does carry some risk for those selling because their wealth is dependent on future growth and stock market valuation. But the pay-off could be big if they execute well.
Still, car dealers, a notoriously independent bunch, may be in for a rude shock if they sell out to companies whose stock is scrutinised by Wall Street.
"I don't think most dealers are cognizant of how quickly the world is changing around them, and how brutal public ownership is," said Colas.
it is probably a good thing the national automobile dealers association annual convention will not be returning any time soon to atlanta where the carmax superstore has made a big splash acting on a request from carmax management a local policeman forced three reporters out of the carmax lot in the atlanta suburb of norcross telling them people associated with the convention were banned from the store a momentary lapse of southern hospitality hardly the incident ranks as only one more illustration of the friction fear and outright hostility caused by the new breed of used car superstores and mega dealers although the superstores now account for only a fraction of the 40 8 million used cars sold in 1996 h wayne huizenga s republic industries inc is on a relentless campaign to buy new vehicle dealerships republic which owns the autonation usa chain added two more dealer groups this week lifting estimated 1997 revenues to more than 2 8 billion the single largest in the country together the carmax and republic models are taking the industry by storm and in the process are tearing apart a system traditional franchised dealers have known for 80 years carmax in particular drew a steady stream of criticism from many dealers and some manufacturers at the convention which wrapped up earlier this week yale gieszl the top toyota motor corp executive in the united states blasted carmax during a press conference saying toyota would not grant a new car franchise to the company i don t think size is equivalent to customer service said gieszl executive vice president of toyota motor sales usa inc officials at carmax returned the favour by turning down all requests for tours of the norcross store the outlet is unique because it is the only carmax to have a new car franchise from chrysler corp which was granted last year morgan stewart a spokesman for circuit city stores inc which owns 80 percent of carmax said there were simply too many requests to accommodate the visitors we had hundreds if not thousands of people showing up looking for tours and we had to keep our primary commitment which was to serve customers he said as for the reporters stewart said they should have first contacted circuit city s public relations department at the company s richmond va headquarters although the superstores have received much attention for emphasising a more friendly sales approach many dealers remain unconvinced they can successfuly run the business side vinje dahl who owns dahl ford in davenport iowa said it is not easy to operate used car businesses profitably on a local level where an intimate knowledge of the market is key profit margins are razor thin and a dealership is considered doing well if its return on sales is 1 5 percent to 2 percent we re in a buying business we aren t really in a selling business he said adding i don t think these guys are buying very smart for now carmax sales are booming for january sales from stores open at least a year were up 33 percent while total sales rose 90 percent to 43 1 million thanks to the addition of two new superstores carmax however is not expected to report significant profits before 1999 said nicholas colas an analyst with credit suisse first boston despite their grousing many of the dealers privately expressed envy and amazement at the prices republic is paying profitable dealerships typically sell for three to five times earnings dealers said but republic is paying for dealer groups in stock that value the deals at 17 to 20 times earnings colas said the fact the deals are for stock and not cash does carry some risk for those selling because their wealth is dependent on future growth and stock market valuation but the pay off could be big if they execute well still car dealers a notoriously independent bunch may be in for a rude shock if they sell out to companies whose stock is scrutinised by wall street i don t think most dealers are cognizant of how quickly the world is changing around them and how brutal public ownership is said colas
Doc 35
Workers striking two Johnson Control Inc. seat assembly plants Tuesday scored a major victory when Ford Motor Co. said it would refuse to accept non-union made seats until the dispute is resolved.
"We had a huge, huge victory here today," Bob King, director of United Auto Worker Region 1A, told a boisterous crowd of strikers and supporters outside of the plant in Plymouth, Mich., a suburb west of Detroit.
More than 300 workers at the plant walked off the job at 6 a.m. Tuesday after talks on a new contract broke down late Monday. The strike at one point drew nearly 2,000 chanting supporters, prompting about than 100 police to turn out, some on horseback.
About 200 employees of a Johnson Controls seat plant in Oberlin, Ohio, also struck the company when their talks collapsed. Workers at both plants agreed last fall to be represented by the UAW in a new labour contract.
The Plymouth plant provides final assembly for seats that go into Ford's hot-selling Expedition full-size sport utility vehicle, which is made at the nearby Michigan Truck plant in Wayne, Mich. The Ohio plant makes seats for Ford's Econoline full-size vans.
Johnson Controls officials did not return telephone calls. In a statement, the company said it will make "every effort" to continue seat production at both plants, including hiring temporary and permanent replacement workers, if necessary.
But union members at the plant said the company abandoned that plan after Ford agreed to not accept seats made by non-union workers.
Representatives from Ford said they had to consider their own union workforces when they were affected by supplier disputes. Ford is generally regarded as having the best labour relations of Detroit's Big Three.
"We're not accepting seats made by the non-union employees of Johnson Controls," said Ford spokesman Bill Carroll.
Johnson Controls made no mention of the Ford decision in a statement issued late in the day. The company said no new negotiations have been scheduled.
UAW spokesman Karl Mantyla said the union was seeking wage parity with other seat suppliers, such as Lear Corp., which pays hourly wages of $14 to $16. Mantyla would not say what Johnson offered, but said the company "did not get close to that."
The UAW is also pressing for resolution of unfair labour practice claims. After workers agreed to be represented by the UAW, Mantyla said Johnson dropped its entry pay rate to $9 an hour from $9.50, cut out a 401(k) retirement plan, and barred union supporters from displaying UAW buttons at company meetings.
In its statement, the company said the UAW rejected what Johnson termed a reasonable and fair offer.
workers striking two johnson control inc seat assembly plants tuesday scored a major victory when ford motor co said it would refuse to accept non union made seats until the dispute is resolved we had a huge huge victory here today bob king director of united auto worker region 1a told a boisterous crowd of strikers and supporters outside of the plant in plymouth mich a suburb west of detroit more than 300 workers at the plant walked off the job at 6 a m tuesday after talks on a new contract broke down late monday the strike at one point drew nearly 2 000 chanting supporters prompting about than 100 police to turn out some on horseback about 200 employees of a johnson controls seat plant in oberlin ohio also struck the company when their talks collapsed workers at both plants agreed last fall to be represented by the uaw in a new labour contract the plymouth plant provides final assembly for seats that go into ford s hot selling expedition full size sport utility vehicle which is made at the nearby michigan truck plant in wayne mich the ohio plant makes seats for ford s econoline full size vans johnson controls officials did not return telephone calls in a statement the company said it will make every effort to continue seat production at both plants including hiring temporary and permanent replacement workers if necessary but union members at the plant said the company abandoned that plan after ford agreed to not accept seats made by non union workers representatives from ford said they had to consider their own union workforces when they were affected by supplier disputes ford is generally regarded as having the best labour relations of detroit s big three we re not accepting seats made by the non union employees of johnson controls said ford spokesman bill carroll johnson controls made no mention of the ford decision in a statement issued late in the day the company said no new negotiations have been scheduled uaw spokesman karl mantyla said the union was seeking wage parity with other seat suppliers such as lear corp which pays hourly wages of 14 to 16 mantyla would not say what johnson offered but said the company did not get close to that the uaw is also pressing for resolution of unfair labour practice claims after workers agreed to be represented by the uaw mantyla said johnson dropped its entry pay rate to 9 an hour from 9 50 cut out a 401 k retirement plan and barred union supporters from displaying uaw buttons at company meetings in its statement the company said the uaw rejected what johnson termed a reasonable and fair offer
Doc 36
One year after Chrysler Corp. stunned traditional car dealers by granting a new car franchise to the CarMax auto superstore chain, a senior Chrysler executive said Sunday the move has been a success.
"We think Car Max represents us well," said Tom Pappert, vice president of sales and service for Chrysler.
Pappert, who spoke to reporters at the National Automobile Dealers Association annual convention here, said competing dealers near the Norcross, Ga., Chrysler/Dodge CarMax dealership have begun to emulate many of CarMax's practices such as money-back guarantees and more generous warranties.
"It takes all of the guess work out of the used car process, and that's exactly what needs to happen," he said, noting the dealership has added new business and not stolen it from other Chrysler dealers.
Chrysler, the first of Detroit's Big Three to ally itself with one of the new superstores, has no plans to expand any more with CarMax, Pappert said. CarMax is a unit of Circuit City Stores Inc..
Like other automakers, Chrysler has a limit on the number of separate dealership storefronts a single owner can have, although exceptions are granted. The company limits owners to 10 separate dealerships in the country, six in a given regional sales zone, and two in a metropolitan area.
But Chrysler has adopted some of the superstore techniques at three new facilities being built in Texas, Maryland and Massachusetts. The stores will give as much exposure to used cars as new cars typically get. They will be set up in a mall-type layout and feature a personal greeter, child playrooms and a cafe.
The superstore concept, as well as dealerships owned by publicly traded companies, have been a source of concern voiced by dealers attending the convention, according to officials at both Chrysler and Ford Motor Co..
However, Pappert said the capital that publicly traded companies have access to can help dealers who find their profits squeezed by increasingly thin margins.
Profits are likely to come under even more pressure as more buyers use the Internet to research and purchase vehicles, said Pappert. He cited a Boston Consulting group study that forecast 25 percent of new vehicle sales will be over the Internet by 2000, adding he believes it will be higher than that.
"It's going north -- not south," Pappert said.
Separately, Ford Division General Manager Ross Roberts said the automaker has had discussions superstore groups, but has not reached any other letters of understanding like the agreement it signed recently with Republic Industries Inc., which owns the AutoNation USA chain.
Under the agreement announced in December, AutoNation can submit proposals to acquire existing Ford or Lincoln-Mercury dealerships. The pact also covers areas that Ford does not have dealerships and wants to start one.
Roberts said Ford has talked with large groups that do not meet the automaker's financial, territorial and cooperative standards.
one year after chrysler corp stunned traditional car dealers by granting a new car franchise to the carmax auto superstore chain a senior chrysler executive said sunday the move has been a success we think car max represents us well said tom pappert vice president of sales and service for chrysler pappert who spoke to reporters at the national automobile dealers association annual convention here said competing dealers near the norcross ga chrysler dodge carmax dealership have begun to emulate many of carmax s practices such as money back guarantees and more generous warranties it takes all of the guess work out of the used car process and that s exactly what needs to happen he said noting the dealership has added new business and not stolen it from other chrysler dealers chrysler the first of detroit s big three to ally itself with one of the new superstores has no plans to expand any more with carmax pappert said carmax is a unit of circuit city stores inc like other automakers chrysler has a limit on the number of separate dealership storefronts a single owner can have although exceptions are granted the company limits owners to 10 separate dealerships in the country six in a given regional sales zone and two in a metropolitan area but chrysler has adopted some of the superstore techniques at three new facilities being built in texas maryland and massachusetts the stores will give as much exposure to used cars as new cars typically get they will be set up in a mall type layout and feature a personal greeter child playrooms and a cafe the superstore concept as well as dealerships owned by publicly traded companies have been a source of concern voiced by dealers attending the convention according to officials at both chrysler and ford motor co however pappert said the capital that publicly traded companies have access to can help dealers who find their profits squeezed by increasingly thin margins profits are likely to come under even more pressure as more buyers use the internet to research and purchase vehicles said pappert he cited a boston consulting group study that forecast 25 percent of new vehicle sales will be over the internet by 2000 adding he believes it will be higher than that it s going north not south pappert said separately ford division general manager ross roberts said the automaker has had discussions superstore groups but has not reached any other letters of understanding like the agreement it signed recently with republic industries inc which owns the autonation usa chain under the agreement announced in december autonation can submit proposals to acquire existing ford or lincoln mercury dealerships the pact also covers areas that ford does not have dealerships and wants to start one roberts said ford has talked with large groups that do not meet the automaker s financial territorial and cooperative standards
Doc 37
Investigators fought frigid, wind-blown snow on Friday trying to recover the remains of 28 adults and one infant killed when a commuter plane crashed into a field and left a blackened crater.
John Hammerschmidt, senior member of the National Transportation Safety Board, told reporters the cockpit voice and flight recorders had not been recovered but that he was sure they would eventually be found.
The devices usually provide investigators with detailed information on the final seconds before a crash.
Hampering the search for both human and aircraft remains were temperatures falling to near zero Fahrenheit (minus 18 Celsius) and ground blizzards that created near white-out conditions. Workers were able to stay in the wooded field for no more than 15 to 20 minutes at a time, he said.
"There is a crater out there" hiding some of the wreckage, he said, including propellers, engines and engine assemblies from the 30-seat, Brazilan-built Embraer 120 operated by Delta Comair.
In addition, eight-foot (2.5 metre) high brush covered with snow from the storm during which the plane crashed on Thursday made recovery efforts difficult, Hammerschmidt said.
"There are remains just all around the entire scene," he said. Local police had removed some of the remains to a morgue and families of some of the victims were taken to a nearby motel, where teams of counsellors were on hand.
Hammerschmidt said the 28 adults and one "babe in arms" aboard the twin-engine propjet lifted off from Cincinnati at 2:53 p.m. EST, and the plane crashed and 3:52 p.m. during its approach to Detroit's Metropolitan Airport.
He said the pilot, Dann Carlsen, 43, of Williamstown, Kentucky, was very experienced and was a flight instructor. He also said the plane was equipped with de-icing systems for the wings, the leading edge of the propellers and for the engines.
Hammerschmidt refused to speculate on whether ice was a factor in the crash. USA Today said a pilot in the vicinity reported icing conditions at about the same altitude the doomed plane was flying minutes before it crashed.
The Cincinnati Post quoted an unidentified Comair pilot on Friday as saying the Embraer 120 can suffer wing icing problems despite a system designed to break up ice through a pneumatic rubber strip on the wing that is inflated and deflated in bad weather.
Michael Bragg, a professor of aeronautical and astronautical engineering at the University of Illinois in Champaign, told Reuters that some eyewitness accounts of the crash point to a "classic horizontal tail stall."
Such stalls have long been considered a problem with smaller propjet planes, he said. Ice on the the horizontal part of the tale can disrupt the airflow that keeps a plane flying level. When flaps are deployed in such a situation, Bragg said, the plane stalls and dives.
investigators fought frigid wind blown snow on friday trying to recover the remains of 28 adults and one infant killed when a commuter plane crashed into a field and left a blackened crater john hammerschmidt senior member of the national transportation safety board told reporters the cockpit voice and flight recorders had not been recovered but that he was sure they would eventually be found the devices usually provide investigators with detailed information on the final seconds before a crash hampering the search for both human and aircraft remains were temperatures falling to near zero fahrenheit minus 18 celsius and ground blizzards that created near white out conditions workers were able to stay in the wooded field for no more than 15 to 20 minutes at a time he said there is a crater out there hiding some of the wreckage he said including propellers engines and engine assemblies from the 30 seat brazilan built embraer 120 operated by delta comair in addition eight foot 2 5 metre high brush covered with snow from the storm during which the plane crashed on thursday made recovery efforts difficult hammerschmidt said there are remains just all around the entire scene he said local police had removed some of the remains to a morgue and families of some of the victims were taken to a nearby motel where teams of counsellors were on hand hammerschmidt said the 28 adults and one babe in arms aboard the twin engine propjet lifted off from cincinnati at 2 53 p m est and the plane crashed and 3 52 p m during its approach to detroit s metropolitan airport he said the pilot dann carlsen 43 of williamstown kentucky was very experienced and was a flight instructor he also said the plane was equipped with de icing systems for the wings the leading edge of the propellers and for the engines hammerschmidt refused to speculate on whether ice was a factor in the crash usa today said a pilot in the vicinity reported icing conditions at about the same altitude the doomed plane was flying minutes before it crashed the cincinnati post quoted an unidentified comair pilot on friday as saying the embraer 120 can suffer wing icing problems despite a system designed to break up ice through a pneumatic rubber strip on the wing that is inflated and deflated in bad weather michael bragg a professor of aeronautical and astronautical engineering at the university of illinois in champaign told reuters that some eyewitness accounts of the crash point to a classic horizontal tail stall such stalls have long been considered a problem with smaller propjet planes he said ice on the the horizontal part of the tale can disrupt the airflow that keeps a plane flying level when flaps are deployed in such a situation bragg said the plane stalls and dives
Doc 38
Investigators fought frigid, wind-blown snow on Friday trying to recover the remains of 28 adults and one infant killed when a commuter plane crashed into a field and left a blackened crater.
Investigators found the plane's "black box" cockpit voice recorder and flight data recorder late on Friday, the NBC and ABC television networks reported, quoting sources close to the investigation.
The devices usually provide investigators with detailed information on the final seconds before a crash.
Hampering the search for both human and aircraft remains were temperatures falling to near zero Fahrenheit (minus 18 Celsius) and ground blizzards that created near white-out conditions.
Workers were able to stay in the wooded field for no more than 15 to 20 minutes at a time, said John Hammerschmidt, senior member of the National Transportation Safety Board.
"There is a crater out there" hiding some of the wreckage, he said, including propellers, engines and engine assemblies from the 30-seat, Brazilan-built Embraer 120 operated by Delta Comair.
In addition, eight-foot (2.5 metre) high brush covered with snow from the storm during which the plane crashed on Thursday made recovery efforts difficult, Hammerschmidt said.
"There are remains just all around the entire scene," he said. Local police had removed some of the remains to a morgue and families of some of the victims were taken to a nearby motel, where teams of counsellors were on hand.
Hammerschmidt said the 28 adults and one "babe in arms" aboard the twin-engine propjet lifted off from Cincinnati at 2:53 p.m. EST, and the plane crashed and 3:52 p.m. during its approach to Detroit's Metropolitan Airport.
He said the pilot, Dann Carlsen, 43, of Williamstown, Kentucky, was very experienced and was a flight instructor. He also said the plane was equipped with de-icing systems for the wings, the leading edge of the propellers and for the engines.
Hammerschmidt refused to speculate on whether ice was a factor in the crash. USA Today said a pilot in the vicinity reported icing conditions at about the same altitude the doomed plane was flying minutes before it crashed.
The Cincinnati Post quoted an unidentified Comair pilot on Friday as saying the Embraer 120 can suffer wing icing problems despite a system designed to break up ice through a pneumatic rubber strip on the wing that is inflated and deflated in bad weather.
Michael Bragg, a professor of aeronautical and astronautical engineering at the University of Illinois in Champaign, told Reuters that some eyewitness accounts of the crash point to a "classic horizontal tail stall."
Such stalls have long been considered a problem with smaller propjet planes, he said. Ice on the the horizontal part of the tale can disrupt the airflow that keeps a plane flying level. When flaps are deployed in such a situation, Bragg said, the plane stalls and dives.
Monroe County Sheriff Tillman Crutchfield told a news conference the recovery of the bodies would last into the weekend.
Those killed included Maureen DeMarco, 37, a teacher from Englewood, Colorado, who was en route to Detroit to attend a memorial service for her brother, Brian Scully, who died on Dec. 22 in the crash of an Airborne Express cargo plane in Virginia.
Also killed was Keita Takenami, 47, a quality control manager at Toyota Motor Corp.'s car assembly plant in Georgetown, Kentucky, and Dexter Adams, 41, a Procter & Gamble Co. purchasing executive.
Wreckage from the crash was strewn over a tight area of about 200 yards (190 metres) by 100 yards (94 metres), Crutchfield said.
In a news briefing in Erlanger, Kentucky, Comair senior vice president Charles Curran said the airline would defer to the NTSB for all future information on the crash.
Cincinnati-based Comair is a regional carrier that flies commuter routes for Delta. Hammerschmidt said the company has 91 planes in its fleet.
The three Cincinnati-based crew members were Carlsen, First Officer Kenneth Reece and Flight Attendant Darinda Ogden, Comair said.
Flight 3272 had been cleared for approach to Detroit Metropolitan Airport when air traffic controllers lost radar contact, Comair's Curran said on Thursday. No distress signals were sent, he said.
investigators fought frigid wind blown snow on friday trying to recover the remains of 28 adults and one infant killed when a commuter plane crashed into a field and left a blackened crater investigators found the plane s black box cockpit voice recorder and flight data recorder late on friday the nbc and abc television networks reported quoting sources close to the investigation the devices usually provide investigators with detailed information on the final seconds before a crash hampering the search for both human and aircraft remains were temperatures falling to near zero fahrenheit minus 18 celsius and ground blizzards that created near white out conditions workers were able to stay in the wooded field for no more than 15 to 20 minutes at a time said john hammerschmidt senior member of the national transportation safety board there is a crater out there hiding some of the wreckage he said including propellers engines and engine assemblies from the 30 seat brazilan built embraer 120 operated by delta comair in addition eight foot 2 5 metre high brush covered with snow from the storm during which the plane crashed on thursday made recovery efforts difficult hammerschmidt said there are remains just all around the entire scene he said local police had removed some of the remains to a morgue and families of some of the victims were taken to a nearby motel where teams of counsellors were on hand hammerschmidt said the 28 adults and one babe in arms aboard the twin engine propjet lifted off from cincinnati at 2 53 p m est and the plane crashed and 3 52 p m during its approach to detroit s metropolitan airport he said the pilot dann carlsen 43 of williamstown kentucky was very experienced and was a flight instructor he also said the plane was equipped with de icing systems for the wings the leading edge of the propellers and for the engines hammerschmidt refused to speculate on whether ice was a factor in the crash usa today said a pilot in the vicinity reported icing conditions at about the same altitude the doomed plane was flying minutes before it crashed the cincinnati post quoted an unidentified comair pilot on friday as saying the embraer 120 can suffer wing icing problems despite a system designed to break up ice through a pneumatic rubber strip on the wing that is inflated and deflated in bad weather michael bragg a professor of aeronautical and astronautical engineering at the university of illinois in champaign told reuters that some eyewitness accounts of the crash point to a classic horizontal tail stall such stalls have long been considered a problem with smaller propjet planes he said ice on the the horizontal part of the tale can disrupt the airflow that keeps a plane flying level when flaps are deployed in such a situation bragg said the plane stalls and dives monroe county sheriff tillman crutchfield told a news conference the recovery of the bodies would last into the weekend those killed included maureen demarco 37 a teacher from englewood colorado who was en route to detroit to attend a memorial service for her brother brian scully who died on dec 22 in the crash of an airborne express cargo plane in virginia also killed was keita takenami 47 a quality control manager at toyota motor corp s car assembly plant in georgetown kentucky and dexter adams 41 a procter amp gamble co purchasing executive wreckage from the crash was strewn over a tight area of about 200 yards 190 metres by 100 yards 94 metres crutchfield said in a news briefing in erlanger kentucky comair senior vice president charles curran said the airline would defer to the ntsb for all future information on the crash cincinnati based comair is a regional carrier that flies commuter routes for delta hammerschmidt said the company has 91 planes in its fleet the three cincinnati based crew members were carlsen first officer kenneth reece and flight attendant darinda ogden comair said flight 3272 had been cleared for approach to detroit metropolitan airport when air traffic controllers lost radar contact comair s curran said on thursday no distress signals were sent he said
Doc 39
After 19 months of sometimes violent confrontations, six striking newspaper unions on Friday made an unconditional offer to return to work at Detroit's two major daily papers.
Al Derey, head of the Metropolitan Council of Newspaper Unions, said the action was not an act of surrender but a tactic to expose the papers to potentially huge financial losses if they do not agree to a fair contract.
"Our position is this strike has not ended. This is simply a new strategy to try to win a fair and decent contract from two corporate giants that don't have any souls," a visibly emotional Derey told a news conference.
About 2,500 distribution, pressroom, newsroom and mailroom workers walked off their jobs at the Detroit Free Press and Detroit News in July 1995 after contract talks collapsed.
The papers are editorially indepdendent and have separate owners but have been published under a joint operating agreement since 1989.
Knight-Ridder Inc. owns the Free Press. The News is owned by Gannett Co. Inc.
A representative from Detroit Newspapers Inc, the joint operating agency, could not be reached for comment.
The papers have published every day since the strike began, although early on they only published a single joint edition. More than 400 of the original strikers have cross picket lines. The papers have hired about 1,400 replacements.
Since the start of the strike, which has often erupted in violent confrontations between supporters and private security guards, circulation at the papers has fallen 30 percent. Advertising revenues are down between 15 percent and 20 percent.
Derey told reporters the advertising boycott has cost the papers a combined $250 million, and 700,000 readers have dropped subscriptions. But because the newspapers "still don't get it," he said the unions need to adopt a new strategy.
If the papers reject the return-to-work offer, they could be liable for back pay from the time the offer was made if they were found to have commited unfair labor practices, said Derey. That amounts to $250,000 a day, or $1 million a year, he said.
The action Friday is a controversial one for many union members, who are staunchly opposed to returning to work. But Derey appealed for their support.
"This wasn't the only strategy and it isn't the easiest, but it is the best way we've got to take on these corporate powers and get us moving again down the road to a fair contract," he said.
One local labor analyst said the union's move was an acknowledgement the strike as a means of leverage has reached the point of diminishing returns. But it does force management to make some difficult decisions.
"What the unions are doing now is upping the legal ante," said Steve Babson, labor program specialist at Wayne State University's Labor Studies Center.
If the papers do not agree to take back all of the striking workers, they could be liable for the back pay penalities if they commited unfair labor practices, a legal process that could take years to resolve, he said.
The Detroit regional director of the NLRB has accused the companies of unfair labor practices, finding they did not bargain in good faith. The company appealed that decision to an administrative law judge, who has not yet issued a ruling.
after 19 months of sometimes violent confrontations six striking newspaper unions on friday made an unconditional offer to return to work at detroit s two major daily papers al derey head of the metropolitan council of newspaper unions said the action was not an act of surrender but a tactic to expose the papers to potentially huge financial losses if they do not agree to a fair contract our position is this strike has not ended this is simply a new strategy to try to win a fair and decent contract from two corporate giants that don t have any souls a visibly emotional derey told a news conference about 2 500 distribution pressroom newsroom and mailroom workers walked off their jobs at the detroit free press and detroit news in july 1995 after contract talks collapsed the papers are editorially indepdendent and have separate owners but have been published under a joint operating agreement since 1989 knight ridder inc owns the free press the news is owned by gannett co inc a representative from detroit newspapers inc the joint operating agency could not be reached for comment the papers have published every day since the strike began although early on they only published a single joint edition more than 400 of the original strikers have cross picket lines the papers have hired about 1 400 replacements since the start of the strike which has often erupted in violent confrontations between supporters and private security guards circulation at the papers has fallen 30 percent advertising revenues are down between 15 percent and 20 percent derey told reporters the advertising boycott has cost the papers a combined 250 million and 700 000 readers have dropped subscriptions but because the newspapers still don t get it he said the unions need to adopt a new strategy if the papers reject the return to work offer they could be liable for back pay from the time the offer was made if they were found to have commited unfair labor practices said derey that amounts to 250 000 a day or 1 million a year he said the action friday is a controversial one for many union members who are staunchly opposed to returning to work but derey appealed for their support this wasn t the only strategy and it isn t the easiest but it is the best way we ve got to take on these corporate powers and get us moving again down the road to a fair contract he said one local labor analyst said the union s move was an acknowledgement the strike as a means of leverage has reached the point of diminishing returns but it does force management to make some difficult decisions what the unions are doing now is upping the legal ante said steve babson labor program specialist at wayne state university s labor studies center if the papers do not agree to take back all of the striking workers they could be liable for the back pay penalities if they commited unfair labor practices a legal process that could take years to resolve he said the detroit regional director of the nlrb has accused the companies of unfair labor practices finding they did not bargain in good faith the company appealed that decision to an administrative law judge who has not yet issued a ruling
Doc 40
U.S. investigators began the grim task on Friday of digging through a snow-covered field to recover the bodies of 29 people killed on Thursday when a commuter plane crashed during a snowstorm near Detroit.
Officials said National Transportation Safety Board (NTSB) investigators would focus on retrieving bodies before looking at the wreckage of the Delta Comair plane.
"We're going to be doing the body recovery first, and the NTSB investigation secondly," Monroe County Sheriff Tilman Crutchfield told a news conference in Monroe, a town about six miles (10 km) from the crash site.
He added that NTSB officials briefly examined the site on Thursday night but had not located the plane's cockpit voice and data recorders.
The Comair plane, an Embraer Brasilia 120 en route to Detroit from Cincinnati, crashed in a snowy field just west of Monroe in Raisinville Township, Mich., about 25 miles (40 km) southwest of Detroit.
Those killed included a teacher from Englewood, Colorado, who was en route to Detroit to attend a memorial service for her brother who died on December 22 in another air crash,
A temporary morgue has been set up at the Custer Airport near Monroe and NTSB officials were expected to be at the crash site by mid-morning.
Wreckage from the crash was strewn over a tight area of about 200 yards (190 metres) by 100 yards (94 metres), Tilman said. Although emergency workers covered the crash site with tarpaulins overnight, he added that snow showers would hamper recovery efforts.
"The weather certainly complicates the situation with the blowing snow," Tilman said. "It certainly hampers the situation and is going to make the recovery more difficult."
Cincinnati-based Comair, an independent carrier that flies commuter routes for Delta, said the 30-seat plane was carrying 26 passengers and three crew members.
The airline sent 30 members of its emergency response team to Michigan on Thursday, according to David Siebenburgen, President of Comair.
"They are there to assist the families, the NTSB and the FAA (Federal Aviation Administration) in any way they can during this ordeal," Siebenburgen said.
Flight 3272 had been cleared for approach to Detroit Metropolitan Airport when air traffic controllers lost radar contact, Comair's Curran said on Thursday. No distress signals were sent, he said.
Comair said the plane has been with the company since February 1992 and had its most recent maintenance checkup on Nov. 20, 1996. The airline denied an earlier report the plane had been grounded two days earlier for rudder problems.
u s investigators began the grim task on friday of digging through a snow covered field to recover the bodies of 29 people killed on thursday when a commuter plane crashed during a snowstorm near detroit officials said national transportation safety board ntsb investigators would focus on retrieving bodies before looking at the wreckage of the delta comair plane we re going to be doing the body recovery first and the ntsb investigation secondly monroe county sheriff tilman crutchfield told a news conference in monroe a town about six miles 10 km from the crash site he added that ntsb officials briefly examined the site on thursday night but had not located the plane s cockpit voice and data recorders the comair plane an embraer brasilia 120 en route to detroit from cincinnati crashed in a snowy field just west of monroe in raisinville township mich about 25 miles 40 km southwest of detroit those killed included a teacher from englewood colorado who was en route to detroit to attend a memorial service for her brother who died on december 22 in another air crash a temporary morgue has been set up at the custer airport near monroe and ntsb officials were expected to be at the crash site by mid morning wreckage from the crash was strewn over a tight area of about 200 yards 190 metres by 100 yards 94 metres tilman said although emergency workers covered the crash site with tarpaulins overnight he added that snow showers would hamper recovery efforts the weather certainly complicates the situation with the blowing snow tilman said it certainly hampers the situation and is going to make the recovery more difficult cincinnati based comair an independent carrier that flies commuter routes for delta said the 30 seat plane was carrying 26 passengers and three crew members the airline sent 30 members of its emergency response team to michigan on thursday according to david siebenburgen president of comair they are there to assist the families the ntsb and the faa federal aviation administration in any way they can during this ordeal siebenburgen said flight 3272 had been cleared for approach to detroit metropolitan airport when air traffic controllers lost radar contact comair s curran said on thursday no distress signals were sent he said comair said the plane has been with the company since february 1992 and had its most recent maintenance checkup on nov 20 1996 the airline denied an earlier report the plane had been grounded two days earlier for rudder problems
Doc 41
Ford Motor Co's long-shot bid to sit down first with the United Auto Workers union paid off, but analysts wondered Wednesday what the automaker had to give up in exchange for being the Big Three's lead-off negotiator.
"Everyone wants to be first, and that's obviously a plus for Ford in that regard," said J.P. Morgan analyst David Bradley. "The question is, what price did they have to pay to be first?"
Since January, analysts and other auto industry observers believed Chrysler Corp would be the UAW's choice to start contract talks, although last month some thought General Motors Corp had a good shot.
Union officials acknowledged Tuesday that Ford was selected, but they declined to comment beyond that. Ford executives also declined to comment other than to say the automaker is "encouraged" by the tone of the talks.
Analysts speculated Ford may have expressed some willingness to help union organizing efforts among its supply base.
That would address job security issues that are crucial to the UAW as the union faces a shrinking membership base.
In return, the union may have agreed to consider a contract that spans more than the traditional three years.
"I think (Ford) would love to have a five or six year agreement," said Michael Ward, an analyst at PaineWebber Inc. "It strengthens Ford's position with the UAW."
A big unknown is how willing Ford is to limit the number of components it buys from outside suppliers, a process known as outsourcing.
But James Harbour, president of Troy, Mich.-based industry consultant Harbour and Associates Inc, said Ford does not have the breadth of engineering talent to bring large numbers of parts in-house.
"I think probably the biggest thing they could give them is to say we'll work with suppliers and ask them to join the union," said Harbour. "Membership is the issue this year."
Not being the lead-off company has in the past been bad news for the two automakers not selected because of the pattern style of bargaining that imposed terms on them.
But analysts said that is not necessarily the case this time.
Unlike prior years, negotiations are continuing with GM and Chrysler. And there are signs the traditional pattern process is no longer as firm as it used to be.
Bradley noted that by holding out, GM has also not lost any negotiating power. "For now, GM is powder-dry. They haven't given up any leverage, which they would have had to do to be first," he said.
In picking Ford, which employs about 104,000 UAW members, the union starts with a company that is recognized as having the best labor relations among the Detroit's Big Three.
Analysts said the relative labor peace has given Ford better work rules and allows it more flexibility to use overtime to increase production. It also has spared the company costly strikes that have hit GM and Chrysler.
The downside, according to Wall Street analysts, is that Ford has not been as aggressive in farming out work to less expensive outside suppliers -- something GM is focusing on.
ford motor co s long shot bid to sit down first with the united auto workers union paid off but analysts wondered wednesday what the automaker had to give up in exchange for being the big three s lead off negotiator everyone wants to be first and that s obviously a plus for ford in that regard said j p morgan analyst david bradley the question is what price did they have to pay to be first since january analysts and other auto industry observers believed chrysler corp would be the uaw s choice to start contract talks although last month some thought general motors corp had a good shot union officials acknowledged tuesday that ford was selected but they declined to comment beyond that ford executives also declined to comment other than to say the automaker is encouraged by the tone of the talks analysts speculated ford may have expressed some willingness to help union organizing efforts among its supply base that would address job security issues that are crucial to the uaw as the union faces a shrinking membership base in return the union may have agreed to consider a contract that spans more than the traditional three years i think ford would love to have a five or six year agreement said michael ward an analyst at painewebber inc it strengthens ford s position with the uaw a big unknown is how willing ford is to limit the number of components it buys from outside suppliers a process known as outsourcing but james harbour president of troy mich based industry consultant harbour and associates inc said ford does not have the breadth of engineering talent to bring large numbers of parts in house i think probably the biggest thing they could give them is to say we ll work with suppliers and ask them to join the union said harbour membership is the issue this year not being the lead off company has in the past been bad news for the two automakers not selected because of the pattern style of bargaining that imposed terms on them but analysts said that is not necessarily the case this time unlike prior years negotiations are continuing with gm and chrysler and there are signs the traditional pattern process is no longer as firm as it used to be bradley noted that by holding out gm has also not lost any negotiating power for now gm is powder dry they haven t given up any leverage which they would have had to do to be first he said in picking ford which employs about 104 000 uaw members the union starts with a company that is recognized as having the best labor relations among the detroit s big three analysts said the relative labor peace has given ford better work rules and allows it more flexibility to use overtime to increase production it also has spared the company costly strikes that have hit gm and chrysler the downside according to wall street analysts is that ford has not been as aggressive in farming out work to less expensive outside suppliers something gm is focusing on
Doc 42
Daily circulation at Detroit's two strike-bound newspapers fell by a third in the first quarter of 1996 from a year ago, according to the first audited figures released since the strike began.
Combined daily circulation of the Free Press and Detroit News was down 33 percent at 576,698 for the January-through-March period, Detroit Newspapers Inc., the joint operating agency that runs two papers, said Friday.
The number, as verified by the Audit Bureau of Circulations, was below the 624,980 that the papers say they distributed, because ABC could not confirm payment or collection for all the papers.
The circulation drop from the same three months in 1995 roughly coincides with the 25 percent to 30 percent decline newspaper officials have acknowledged since the strike began in July 1995.
About 2,500 pressroom, mailroom, delivery and newsroom employees from six unions walked off the job in a dispute over proposed work rule changes and job cuts. Knight-Ridder Inc. owns the Free Press. The News is owned by Gannett Co. Inc..
Circulation for the combined Sunday edition as counted by the Audit Bureau declined to 769,594, a 29 percent drop from 1,085,677 in the year-ago period. Detroit Newspapers said they distributed 844,335 combined Sunday papers.
The Audit Bureau, which contacted thousands of subscribers, had trouble guaranteeing that all of the subscriptions had been paid. They also found some readers were reluctant to admit they read the struck papers, the newspapers said.
Detroit Newspapers officials said they have concentrated more on delivering papers during the strike than on collecting for them.
"As time has gone by, we have been increasingly successful at re-establishing all of our distribution procedures, including billing and collection," said Rob Althaus, senior vice president of circulation, in a statement.
The newspapers said their combined daily net paid circulation in the April-through-August period has increased by 25,000, or 4.5 percent, using the Audit Bureau criteria for calculating paid subscribers. Sunday circulation for the same period grew by 18,000, or 2.4 percent.
Roger Kerson, a spokesman for the striking unions, said the audited figures reinforce the unions' position that it was too costly to produce papers under strike conditions.
"They show a critical and devastating loss of readership," said Kerson. "I hope the admission of these horrible circulation numbers will lead to some (bargaining) progress."
No negotiations were held this week, although some meetings are scheduled for next week, the papers said.
daily circulation at detroit s two strike bound newspapers fell by a third in the first quarter of 1996 from a year ago according to the first audited figures released since the strike began combined daily circulation of the free press and detroit news was down 33 percent at 576 698 for the january through march period detroit newspapers inc the joint operating agency that runs two papers said friday the number as verified by the audit bureau of circulations was below the 624 980 that the papers say they distributed because abc could not confirm payment or collection for all the papers the circulation drop from the same three months in 1995 roughly coincides with the 25 percent to 30 percent decline newspaper officials have acknowledged since the strike began in july 1995 about 2 500 pressroom mailroom delivery and newsroom employees from six unions walked off the job in a dispute over proposed work rule changes and job cuts knight ridder inc owns the free press the news is owned by gannett co inc circulation for the combined sunday edition as counted by the audit bureau declined to 769 594 a 29 percent drop from 1 085 677 in the year ago period detroit newspapers said they distributed 844 335 combined sunday papers the audit bureau which contacted thousands of subscribers had trouble guaranteeing that all of the subscriptions had been paid they also found some readers were reluctant to admit they read the struck papers the newspapers said detroit newspapers officials said they have concentrated more on delivering papers during the strike than on collecting for them as time has gone by we have been increasingly successful at re establishing all of our distribution procedures including billing and collection said rob althaus senior vice president of circulation in a statement the newspapers said their combined daily net paid circulation in the april through august period has increased by 25 000 or 4 5 percent using the audit bureau criteria for calculating paid subscribers sunday circulation for the same period grew by 18 000 or 2 4 percent roger kerson a spokesman for the striking unions said the audited figures reinforce the unions position that it was too costly to produce papers under strike conditions they show a critical and devastating loss of readership said kerson i hope the admission of these horrible circulation numbers will lead to some bargaining progress no negotiations were held this week although some meetings are scheduled for next week the papers said
Doc 43
Investigators of Thursday's Delta Comair crash were trying to determine on Saturday the nature of what they called "an unexplained event" shortly before the plane plummeted to the ground killing 29 people.
"Approximately one minute after leveling off at 4,000 ft (1,200 m) an unexplained event took place, normal operations ceased and the airplane crashed shortly thereafter," John Hammerschmidt, the National Transportation Safety Board chief spokesman told a news conference.
"At this juncture, it is an event we are trying to understand," he added.
NTSB investigators said they had determined something happened from listening to the "black box" cockpit voice recorder, but they refused to tell reporters what the pilots said.
Investigators were still reviewing the cockpit voice recorder and flight data recorder boxes at their laboratory in Washington D.C., said Hammerschmidt, who added that nothing had been ruled out in trying to determine the cause.
"The cockpit voice recorder indicated an uneventful routine orderly businesslike flight," he added.
Flight 3272 was enroute to Detroit from Cincinnati when it went down about 25 miles (40 kms) south of the airport in rural Monroe County in southeast Michigan on Thursday, killing 28 adults and one infant.
Hammerschmidt said eye-witnesses reported seeing the plane's wings rock (corrects from "lock") before it plunged out of the sky.
He said there was apparently a large amount of wing rocking (corrects from "locking") after which the plane briefly stabilised.
"They all indicated that the airplane stabilised, then the nose of the aircraft abruptly pitched down and descended vertically to the ground," he said.
Hammerschmidt said the NTSB had learned that 20 minutes after the crash the pilot of a DC3 aircraft reported icing 25 miles southwest of Detroit airport.
He said the previous crew of the doomed plane had on at least two occasions earlier in the day successfully used the entire de-icing system of the plane.
He said there were no strong winds at the time of the accident, cloud cover was at 1500 feet (457.2 metres) and visibility was one to three miles (1.6 to 4.8 km).
(Corrects cloud cover figures from 15,000 feet (4,570 metres).)
Capt. Dann Carlsen had a total of 5,329 flight hours and his co-pilot Ken Reece 2,582 hours, Hammerschmidt said, adding both "were reported to be very good pilots."
Both engines of the plane showed they were rotating and working on impact and all eight power blades showed damage consistent with fact they were rotating on impact.
Some observers had suggested the crash could have been caused by broken propeller blades. Propeller problems have been blamed for two previous fatal crashes involving the Brasilia model.
the Monroe county medical examiner said there were still remains to be removed and that the identification process was expected to begin on Saturday.
investigators of thursday s delta comair crash were trying to determine on saturday the nature of what they called an unexplained event shortly before the plane plummeted to the ground killing 29 people approximately one minute after leveling off at 4 000 ft 1 200 m an unexplained event took place normal operations ceased and the airplane crashed shortly thereafter john hammerschmidt the national transportation safety board chief spokesman told a news conference at this juncture it is an event we are trying to understand he added ntsb investigators said they had determined something happened from listening to the black box cockpit voice recorder but they refused to tell reporters what the pilots said investigators were still reviewing the cockpit voice recorder and flight data recorder boxes at their laboratory in washington d c said hammerschmidt who added that nothing had been ruled out in trying to determine the cause the cockpit voice recorder indicated an uneventful routine orderly businesslike flight he added flight 3272 was enroute to detroit from cincinnati when it went down about 25 miles 40 kms south of the airport in rural monroe county in southeast michigan on thursday killing 28 adults and one infant hammerschmidt said eye witnesses reported seeing the plane s wings rock corrects from lock before it plunged out of the sky he said there was apparently a large amount of wing rocking corrects from locking after which the plane briefly stabilised they all indicated that the airplane stabilised then the nose of the aircraft abruptly pitched down and descended vertically to the ground he said hammerschmidt said the ntsb had learned that 20 minutes after the crash the pilot of a dc3 aircraft reported icing 25 miles southwest of detroit airport he said the previous crew of the doomed plane had on at least two occasions earlier in the day successfully used the entire de icing system of the plane he said there were no strong winds at the time of the accident cloud cover was at 1500 feet 457 2 metres and visibility was one to three miles 1 6 to 4 8 km corrects cloud cover figures from 15 000 feet 4 570 metres capt dann carlsen had a total of 5 329 flight hours and his co pilot ken reece 2 582 hours hammerschmidt said adding both were reported to be very good pilots both engines of the plane showed they were rotating and working on impact and all eight power blades showed damage consistent with fact they were rotating on impact some observers had suggested the crash could have been caused by broken propeller blades propeller problems have been blamed for two previous fatal crashes involving the brasilia model the monroe county medical examiner said there were still remains to be removed and that the identification process was expected to begin on saturday
Doc 44
MGM Grand Inc. Wednesday announced a partnership with several prominent local civic and business leaders to build a casino in Detroit, joining a parade of high-profile suitors vying for three downtown gambling licenses.
MGM Chairman Terrence Lanni said following a news conference here that total investment in the proposed casino complex would be more than $400 million.
"It could be more -- I would expect it to be more," Lanni said.
Officials from MGM and the nine local partners, mostly African-American, refused to disclose details about the size and theme of their casino plans. They said it would be inappropriate to do so before an application is submitted and city leaders decide where the casino can be built.
Michigan voters last November approved legislation that would grant three licenses for operating casinos in Detroit, making it the largest American city to have legalised gambling.
Two local gambling groups that financed the pro-gambling lobbying efforts last fall are presumed to be in line for two of the licenses. Those companies are Greektown Casino LLC and Atwater Entertainment Inc.
In addition to MGM Grand, casino operators that have expressed interest in Detroit include Harrahs Entertainment Inc., Mirage Resorts Inc. and Circus-Circus Enterprises Inc.
Las Vegas-based MGM is known for its glitzy, entertainment-themed casinos, and Lanni made clear he envisions something similar for Detroit -- possibly involving a Motown theme.
"We're in the gaming entertainment business. We're competing for the entertainment dollar. Unless you have something that is very special, that is something people want to visit and re-visit, you're going to lose out to other entertainment venues," Lanni said.
In addition to its reputation, Lanni boasted that MGM has the financial might to build a casino and possibly a hotel in Detroit. The company has received a commitment to boost its line of credit to $1 billion from $600 million.
Lanni also stressed that MGM is a good corporate citizen that would help revitalise the lagging downtown Detroit area if its application was approved. But in an ironic twist, standing behind Lanni at the briefing was Alex Yemenidjian, MGM's president and chief operating officer.
Yemenidjian, who said nothing at the press conference, was a key part of the hostile takeover attempt of Chrysler Corp. by MGM controlling shareholder Kirk Kerkorian in April 1995. Kerkorian and his Tracinda Corp. eventually abandoned his effort and signed a truce with Chrysler.
Chrysler Vice Chairman Thomas Denomme was recently appointed chairman of the Michigan Gaming Control Board, the agency charged with licensing and regulating the new casinos.
It was unclear how Denomme would handle his position when it comes to ruling on the MGM application.
The local investment group is led by William Pickard, chairman of Regal Plastics Co. Other investors include Roy S. Roberts, general manager of General Motors Corp.'s Pontiac-GMC division; Anthony Grainer, president and CEO of Malan Realty Investors Inc.; and Dr. Arthur Johnson, retired Wayne State University vice president and vice chairman of New Detroit, Inc.
mgm grand inc wednesday announced a partnership with several prominent local civic and business leaders to build a casino in detroit joining a parade of high profile suitors vying for three downtown gambling licenses mgm chairman terrence lanni said following a news conference here that total investment in the proposed casino complex would be more than 400 million it could be more i would expect it to be more lanni said officials from mgm and the nine local partners mostly african american refused to disclose details about the size and theme of their casino plans they said it would be inappropriate to do so before an application is submitted and city leaders decide where the casino can be built michigan voters last november approved legislation that would grant three licenses for operating casinos in detroit making it the largest american city to have legalised gambling two local gambling groups that financed the pro gambling lobbying efforts last fall are presumed to be in line for two of the licenses those companies are greektown casino llc and atwater entertainment inc in addition to mgm grand casino operators that have expressed interest in detroit include harrahs entertainment inc mirage resorts inc and circus circus enterprises inc las vegas based mgm is known for its glitzy entertainment themed casinos and lanni made clear he envisions something similar for detroit possibly involving a motown theme we re in the gaming entertainment business we re competing for the entertainment dollar unless you have something that is very special that is something people want to visit and re visit you re going to lose out to other entertainment venues lanni said in addition to its reputation lanni boasted that mgm has the financial might to build a casino and possibly a hotel in detroit the company has received a commitment to boost its line of credit to 1 billion from 600 million lanni also stressed that mgm is a good corporate citizen that would help revitalise the lagging downtown detroit area if its application was approved but in an ironic twist standing behind lanni at the briefing was alex yemenidjian mgm s president and chief operating officer yemenidjian who said nothing at the press conference was a key part of the hostile takeover attempt of chrysler corp by mgm controlling shareholder kirk kerkorian in april 1995 kerkorian and his tracinda corp eventually abandoned his effort and signed a truce with chrysler chrysler vice chairman thomas denomme was recently appointed chairman of the michigan gaming control board the agency charged with licensing and regulating the new casinos it was unclear how denomme would handle his position when it comes to ruling on the mgm application the local investment group is led by william pickard chairman of regal plastics co other investors include roy s roberts general manager of general motors corp s pontiac gmc division anthony grainer president and ceo of malan realty investors inc and dr arthur johnson retired wayne state university vice president and vice chairman of new detroit inc
Doc 45
A commuter plane heading for Detroit in a heavy snowstorm crashed in a remote wooded area south of the city on Thursday, killing all 30 on board, officials said.
The Embraer-120, operated as flight 3272 by Comair, a regional carrier based in Cincinnati, crashed at 3:50 p.m. EST (2050 GMT) near the town of Ida about 25 miles (40 km) from Detroit near the Raisin River.
Comair operates as a feeder for Delta Airlines.
A nearby resident, Thomas Marino, said he heard the plane flying low overhead while shoveling snow off his driveway.
"I heard a jet flying very low. Then a loud boom, a vibration. I didn't see the fireball," he told Reuters. "It sounded low, but planes fly low all the time over here, especially when it's overcast."
Much of the region had been hit by a storm which dumped a half foot (15 cm) or more of snow. There was no confirmation, however, that weather played a role in the crash.
Marino said he drove one-half mile (0.8 km) to the crash site, but could only see smoke and rescue workers swarming around.
He said the plane crashed into what looked like a farm field, just south of the Raisin River.
Television film footage showed only a blackened gash in a snowy field.
The National Transportation Safety Board in Washington said the plane carried 25 passengers, two pilots and three flight attendants and that none survived.
The flight originated in Cincinnati.
One man who lived near the crash site told a Detroit radio station there was an "unbelievable" explosion and fireball when the plane crashed.
Any plane carrying 70 or less is considered a commuter flight though some routinely operate under the same safety and flight rules that govern larger aircraft.
In October 1994, icing caused a French-built American Eagle ATR-72 to crash in northern Indiana, killing all 68 on board. The plane's manufacturer later made revisions to de-icing equipment.
CNN reported that the Brazilian-made Embraer-120 has been involved in 13 other crashes since 1986 where lives were lost, including an accident in Georgia that killed former Senator John Tower.
a commuter plane heading for detroit in a heavy snowstorm crashed in a remote wooded area south of the city on thursday killing all 30 on board officials said the embraer 120 operated as flight 3272 by comair a regional carrier based in cincinnati crashed at 3 50 p m est 2050 gmt near the town of ida about 25 miles 40 km from detroit near the raisin river comair operates as a feeder for delta airlines a nearby resident thomas marino said he heard the plane flying low overhead while shoveling snow off his driveway i heard a jet flying very low then a loud boom a vibration i didn t see the fireball he told reuters it sounded low but planes fly low all the time over here especially when it s overcast much of the region had been hit by a storm which dumped a half foot 15 cm or more of snow there was no confirmation however that weather played a role in the crash marino said he drove one half mile 0 8 km to the crash site but could only see smoke and rescue workers swarming around he said the plane crashed into what looked like a farm field just south of the raisin river television film footage showed only a blackened gash in a snowy field the national transportation safety board in washington said the plane carried 25 passengers two pilots and three flight attendants and that none survived the flight originated in cincinnati one man who lived near the crash site told a detroit radio station there was an unbelievable explosion and fireball when the plane crashed any plane carrying 70 or less is considered a commuter flight though some routinely operate under the same safety and flight rules that govern larger aircraft in october 1994 icing caused a french built american eagle atr 72 to crash in northern indiana killing all 68 on board the plane s manufacturer later made revisions to de icing equipment cnn reported that the brazilian made embraer 120 has been involved in 13 other crashes since 1986 where lives were lost including an accident in georgia that killed former senator john tower
Doc 46
Ford Motor Co. Wednesday threatened to halt production at three plants in Michigan and Ohio if Johnson Controls Inc. and the United Auto Workers did not work out a solution to a nine-day strike.
Ford's action would idle about 6,800 hourly workers and suspend production of two of its best-selling and most profitable vehicles, the Expedition full-size sport/utility and F-Series pickup trucks.
Ford spokeswoman Francine Romine-MacBride said the automaker told UAW locals Wednesday afternoon if an agreement was not reached by Thursday, production will stop at the end of the regular afternoon shift that day.
Plants that would be affected are in Wayne, Mich., Lorain, Ohio, and Avon Lake, Ohio.
About 500 UAW workers at two Johnson Controls plants walked off the job on Jan. 28 when talks broke down on a new contract with the Milwaukee-based company. The plants, located in Plymouth, Mich., and Oberlin, Ohio, make seats for the Expedition and Econoline and Club Wagon full-size vans.
The action marks Ford's most public and aggressive action to push the two sides toward a resolution since it refused to accept seats made by non-union replacements several hours after the strike began.
Negotiations resumed Wednesday afternoon after breaking off Tuesday, Johnson Controls spokesman Jeff Steiner said.
Thinking the strike would end quickly, Ford has been continuing to make Expeditions and Econolines with temporary seats and storing the vehicles in nearby lots. By the end of production today, the company will have about 6,800 Expeditions and 6,300 Econolines without proper seats.
Dealers had a 26-day supply of Expeditions on their lots at the end of January. The industry typically considers a 60-day supply to be ideal.
Ford officials expressed concern that Johnson Controls would have problems meeting Ford's ongoing requirements in addition to catching up to Expeditions and Econolines already made.
"We really truly believed there would be an early settlement and that's clearly not the case," Romine-MacBride said.
In additions to Expeditions, Ford makes its popular F-Series pickups at truck plant in Wayne, where 4,000 UAW members work.
The Lorain plant does final assembly of Econolines and Club Wagons. About 1,500 workers would be affected by a shutdown. Production of the Thunderbird and Cougar cars would be affected, although those lines already were idled for separate reasons.
At the Avon Lake plant, which makes frames for the commercial vans, 1,300 workers would be affected. Frame production of the Mercury Villager and Nissan Quest minivans would not be affected, Ford said.
Ford officials declined to comment on how much the strike was likely to cost Ford.
UAW spokesman Karl Mantyla declined to comment on Ford's action. Steiner at Johnson Controls said the company was aware of Ford's position and was committed to settling the strike as soon as possible.
The two sides were at odds over pay levels for a new contract. The union says it wants the same hourly rate of $14 to $16 that competitors pay. But Steiner said Johnson Controls has put forth a competitive offer.
"We feel we've got a fair and reasonable package on the table that compares favourably to what the UAW has agreed to at other supplier plants," he said.
ford motor co wednesday threatened to halt production at three plants in michigan and ohio if johnson controls inc and the united auto workers did not work out a solution to a nine day strike ford s action would idle about 6 800 hourly workers and suspend production of two of its best selling and most profitable vehicles the expedition full size sport utility and f series pickup trucks ford spokeswoman francine romine macbride said the automaker told uaw locals wednesday afternoon if an agreement was not reached by thursday production will stop at the end of the regular afternoon shift that day plants that would be affected are in wayne mich lorain ohio and avon lake ohio about 500 uaw workers at two johnson controls plants walked off the job on jan 28 when talks broke down on a new contract with the milwaukee based company the plants located in plymouth mich and oberlin ohio make seats for the expedition and econoline and club wagon full size vans the action marks ford s most public and aggressive action to push the two sides toward a resolution since it refused to accept seats made by non union replacements several hours after the strike began negotiations resumed wednesday afternoon after breaking off tuesday johnson controls spokesman jeff steiner said thinking the strike would end quickly ford has been continuing to make expeditions and econolines with temporary seats and storing the vehicles in nearby lots by the end of production today the company will have about 6 800 expeditions and 6 300 econolines without proper seats dealers had a 26 day supply of expeditions on their lots at the end of january the industry typically considers a 60 day supply to be ideal ford officials expressed concern that johnson controls would have problems meeting ford s ongoing requirements in addition to catching up to expeditions and econolines already made we really truly believed there would be an early settlement and that s clearly not the case romine macbride said in additions to expeditions ford makes its popular f series pickups at truck plant in wayne where 4 000 uaw members work the lorain plant does final assembly of econolines and club wagons about 1 500 workers would be affected by a shutdown production of the thunderbird and cougar cars would be affected although those lines already were idled for separate reasons at the avon lake plant which makes frames for the commercial vans 1 300 workers would be affected frame production of the mercury villager and nissan quest minivans would not be affected ford said ford officials declined to comment on how much the strike was likely to cost ford uaw spokesman karl mantyla declined to comment on ford s action steiner at johnson controls said the company was aware of ford s position and was committed to settling the strike as soon as possible the two sides were at odds over pay levels for a new contract the union says it wants the same hourly rate of 14 to 16 that competitors pay but steiner said johnson controls has put forth a competitive offer we feel we ve got a fair and reasonable package on the table that compares favourably to what the uaw has agreed to at other supplier plants he said
Doc 47
Launching a fresh assault on the U.S. minivan market, Toyota Motor Co. introduced its 1998 Sienna at the North American International Auto Show Wednesday, describing the vehicle as the "Camry of minivans."
But capacity constraints will prohibit the Sienna from loosening Chrysler's Corp.'s iron grip on the 1.1 million unit market.
Designed in Japan, the Sienna features more conservative styling than the Chrysler products, which dominate the U.S. market for the popular vehicles about a 46 percent stake.
Toyota's low-key approach carried over to the introduction of its new vehicle.
Shunning the rappeling executives and mock thunderstorms of other automakers at the show, Toyota simply pulled back a black curtain, without fanfare, to reveal the vehicle.
The front-wheel-drive Sienna will be built off a slightly longer version of the Camry sedan platform. It will come with essentially the same 3.0 litre V6 engine and four-speed automatic transmission as the Camry.
Like minivans from Chrysler and General Motors Corp., the Sienna will offer an optional fourth door on the driver's side.
Pricing has not been determined. But Dave Illingworth, general manager of the Toyota Division in the United States, said it will be below the more than $30,000 pricetag the Previa started at and will be aimed at the middle of the minivan market.
The rear-wheel drive Previa, which was introduced in 1990, will be dropped when the Sienna goes on sale in the fall, Illingworth said.
Toyota expects to sell 50,000 to 60,000 Siennas -- all it will be able to produce at its plant in Georgetown, Ky. The facility has annual volume capacity of about 500,000 units, but is also responsible for making the Camry and Avalon.
Illingworth said Toyota has no plans for additional capacity expansion in North America and does not expect to start producing the Siennas in Japan for export to the U.S. market.
By replacing the poor-selling Previa, Toyota is hoping to give existing Toyota buyers a durable, moderately priced alternative.
"This is an attempt to keep our buyers in the franchise," he said. "I don't see us challenging Chrysler."
Neither does Dennis Pawley, executive vice president of manufacturing for Chrysler, who attended the Sienna unveiling. Although the minivan segment of the market has not grown for about six months, Pawley said the battle for market share is not likely to hurt Chrysler, which has the most loyal minivan owners.
"This is going to hurt GM and Ford (Motor Co) much more than it's going to hurt our sales," he said.
But Richard Wagoner, president of GM's North American Operations, said the automaker plans to gain share when its new line of minivans begin arriving in heavier volumes throughout this year. However, he added, "We never underestimate Toyota."
Susan Jacobs, who runs the industry consulting firm Jacobs & Associates, said the tight production volumes indicates Toyota will sell all it can make of the new vans. She predicted the Sienna's conservative looks will not hurt its sales.
"You don't need to be the style leader to succeed in minivans," she said.
launching a fresh assault on the u s minivan market toyota motor co introduced its 1998 sienna at the north american international auto show wednesday describing the vehicle as the camry of minivans but capacity constraints will prohibit the sienna from loosening chrysler s corp s iron grip on the 1 1 million unit market designed in japan the sienna features more conservative styling than the chrysler products which dominate the u s market for the popular vehicles about a 46 percent stake toyota s low key approach carried over to the introduction of its new vehicle shunning the rappeling executives and mock thunderstorms of other automakers at the show toyota simply pulled back a black curtain without fanfare to reveal the vehicle the front wheel drive sienna will be built off a slightly longer version of the camry sedan platform it will come with essentially the same 3 0 litre v6 engine and four speed automatic transmission as the camry like minivans from chrysler and general motors corp the sienna will offer an optional fourth door on the driver s side pricing has not been determined but dave illingworth general manager of the toyota division in the united states said it will be below the more than 30 000 pricetag the previa started at and will be aimed at the middle of the minivan market the rear wheel drive previa which was introduced in 1990 will be dropped when the sienna goes on sale in the fall illingworth said toyota expects to sell 50 000 to 60 000 siennas all it will be able to produce at its plant in georgetown ky the facility has annual volume capacity of about 500 000 units but is also responsible for making the camry and avalon illingworth said toyota has no plans for additional capacity expansion in north america and does not expect to start producing the siennas in japan for export to the u s market by replacing the poor selling previa toyota is hoping to give existing toyota buyers a durable moderately priced alternative this is an attempt to keep our buyers in the franchise he said i don t see us challenging chrysler neither does dennis pawley executive vice president of manufacturing for chrysler who attended the sienna unveiling although the minivan segment of the market has not grown for about six months pawley said the battle for market share is not likely to hurt chrysler which has the most loyal minivan owners this is going to hurt gm and ford motor co much more than it s going to hurt our sales he said but richard wagoner president of gm s north american operations said the automaker plans to gain share when its new line of minivans begin arriving in heavier volumes throughout this year however he added we never underestimate toyota susan jacobs who runs the industry consulting firm jacobs amp associates said the tight production volumes indicates toyota will sell all it can make of the new vans she predicted the sienna s conservative looks will not hurt its sales you don t need to be the style leader to succeed in minivans she said
Doc 48
Convinced there is no quick end in sight to a crippling seat supplier strike, Ford Motor Co. said Monday it was moving ahead with a plan to resume production of its Expedition full-size sport utilty vehicle with seats from another company.
Ford hopes to finalize its restart efforts by the middle or end of this week, said spokesman Bert Serre. Lear Corp., the substitute seat supplier, plans to start making the seats later this week.
The automaker halted production of the Expedition and Econoline and Club Wagon full-size vans early Friday afternoon, idling 6,800 workers in Michigan and Ohio.
Ford had hoped a 14-day strike by about 500 United Auto Workers union members at two Johnson Controls Inc. seat plants would be settled. In deference to its own union workforce, Ford refused to accept seats made by non-union replacements.
Ford, however, made 7,700 Expeditions and 7,100 Econolines without seats, before it ran out of storage room and grew concerned over Johnson Controls' ability to meet the backlog and regular production demand. Over the weekend, Ford made its own labor negtiators available to help resolve the dispute.
"From our position, we're disappointed that Johnson Controls and the UAW haven't been able to reach a settlement. We've done everything we could," said Serre. "Now, we've made the decision to act."
The seat agreement with Lear is a temporary one, company officials said. Lear spokeswoman Leslie Touma would not disclose what Detroit area plant will make the seats. Touma also declined to comment on what reaction Lear's unionized workers might have to the company's decision.
"Ford is a valued Lear customer, and we're trying to help them out during this time," she said.
Ford will first focus on putting seats in new Expeditions built once production resumes, said Serre. It will then turn its attention to the backlog of Expeditions built without seats. The Expedition is one of Ford's most profitable vehicles, generating an estimated $10,000 in pre-tax profits, according to analysts.
Johnson Controls and the UAW have not held discussions since Thursday, and none are scheduled, Steiner said. The two sides are at odds over terms for a new contract.
convinced there is no quick end in sight to a crippling seat supplier strike ford motor co said monday it was moving ahead with a plan to resume production of its expedition full size sport utilty vehicle with seats from another company ford hopes to finalize its restart efforts by the middle or end of this week said spokesman bert serre lear corp the substitute seat supplier plans to start making the seats later this week the automaker halted production of the expedition and econoline and club wagon full size vans early friday afternoon idling 6 800 workers in michigan and ohio ford had hoped a 14 day strike by about 500 united auto workers union members at two johnson controls inc seat plants would be settled in deference to its own union workforce ford refused to accept seats made by non union replacements ford however made 7 700 expeditions and 7 100 econolines without seats before it ran out of storage room and grew concerned over johnson controls ability to meet the backlog and regular production demand over the weekend ford made its own labor negtiators available to help resolve the dispute from our position we re disappointed that johnson controls and the uaw haven t been able to reach a settlement we ve done everything we could said serre now we ve made the decision to act the seat agreement with lear is a temporary one company officials said lear spokeswoman leslie touma would not disclose what detroit area plant will make the seats touma also declined to comment on what reaction lear s unionized workers might have to the company s decision ford is a valued lear customer and we re trying to help them out during this time she said ford will first focus on putting seats in new expeditions built once production resumes said serre it will then turn its attention to the backlog of expeditions built without seats the expedition is one of ford s most profitable vehicles generating an estimated 10 000 in pre tax profits according to analysts johnson controls and the uaw have not held discussions since thursday and none are scheduled steiner said the two sides are at odds over terms for a new contract
Doc 49
National Transportation Safety Board (NTSB) investigators were preparing to examine the wreckage on Friday of a Delta Comair plane that crashed in a snowstorm on Thursday, killing all 29 people on board.
The commuter plane, an Embraer Brasilia 120 en route to Detroit from Cincinnati, crashed in Raisinville Township about 25 miles (40 km) southwest of Detroit.
NTSB officials arrived in Michigan on Thursday and immediately set up a command post in Ann Arbor, which is near the site of the crash. The wreckage was brought together under a tarpaulin to protect it from snow and was being guarded until the probe began.
Investigators met early on Friday to plan strategy for the probe and were expected to begin combing the mangled wreckage later in the day.
Cincinnati-based Comair, an independent carrier that flies commuter routes for Delta, said the 30-seat plane was carrying 26 passengers and three crew members.
The three Cincinnati-based crew members were Captain Dann Carlsen, First Officer Kenneth Reece and Flight Attendant Darinda Ogden, Comair said in a statement early on Friday.
The airline sent 30 members of its emergency response team to Michigan on Thursday, according to David Siebenburgen, President of Comair.
"They are there to assist the families, the NTSB and the FAA (Federal Aviation Administration) in any way they can during this ordeal," Siebenburgen said.
A news conference was scheduled by the airline for 8:30 a.m. EST (1330 GMT) at Cincinnati airport in Erlanger, Ky.
Flight 3272 had been cleared for approach to Detroit Metropolitan Airport when air traffic controllers lost radar contact, Comair Senior Vice President of Marketing Charles Curran told a news briefing on Thursday. No distress signals were sent, he said.
Comair said the plane has been with the company since February 1992 and had its most recent maintenance checkup on Nov. 20, 1996. The airline denied an earlier report the plane had been grounded two days earlier for rudder problems.
Witnesses told local television crews the plane's engines made a sputtering sound before it crashed into the ground at a sharp angle. The plane exploded into a fireball that sent a black mushroom cloud into the air that left "just pieces" of the twin-prop airliner.
The area and much of the region had been hit by a storm which dumped six inches (15 cm) or more of snow. While air traffic was snarled in Chicago and other cities there was no confirmation that weather played a role in the crash.
In October 1994 icing caused a French-built American Eagle ATR-72 to crash in northern Indiana, killing all 68 on board. The plane's manufacturer later made revisions to de-icing equipment.
CNN reported that the Brazilian-made Embraer-120 has been involved in 13 other crashes since 1986 where lives were lost, including an accident in Georgia that killed former Senator John Tower.
national transportation safety board ntsb investigators were preparing to examine the wreckage on friday of a delta comair plane that crashed in a snowstorm on thursday killing all 29 people on board the commuter plane an embraer brasilia 120 en route to detroit from cincinnati crashed in raisinville township about 25 miles 40 km southwest of detroit ntsb officials arrived in michigan on thursday and immediately set up a command post in ann arbor which is near the site of the crash the wreckage was brought together under a tarpaulin to protect it from snow and was being guarded until the probe began investigators met early on friday to plan strategy for the probe and were expected to begin combing the mangled wreckage later in the day cincinnati based comair an independent carrier that flies commuter routes for delta said the 30 seat plane was carrying 26 passengers and three crew members the three cincinnati based crew members were captain dann carlsen first officer kenneth reece and flight attendant darinda ogden comair said in a statement early on friday the airline sent 30 members of its emergency response team to michigan on thursday according to david siebenburgen president of comair they are there to assist the families the ntsb and the faa federal aviation administration in any way they can during this ordeal siebenburgen said a news conference was scheduled by the airline for 8 30 a m est 1330 gmt at cincinnati airport in erlanger ky flight 3272 had been cleared for approach to detroit metropolitan airport when air traffic controllers lost radar contact comair senior vice president of marketing charles curran told a news briefing on thursday no distress signals were sent he said comair said the plane has been with the company since february 1992 and had its most recent maintenance checkup on nov 20 1996 the airline denied an earlier report the plane had been grounded two days earlier for rudder problems witnesses told local television crews the plane s engines made a sputtering sound before it crashed into the ground at a sharp angle the plane exploded into a fireball that sent a black mushroom cloud into the air that left just pieces of the twin prop airliner the area and much of the region had been hit by a storm which dumped six inches 15 cm or more of snow while air traffic was snarled in chicago and other cities there was no confirmation that weather played a role in the crash in october 1994 icing caused a french built american eagle atr 72 to crash in northern indiana killing all 68 on board the plane s manufacturer later made revisions to de icing equipment cnn reported that the brazilian made embraer 120 has been involved in 13 other crashes since 1986 where lives were lost including an accident in georgia that killed former senator john tower
Doc 50
Contract talks resumed Sunday between American Axle & Manufacturing Inc. and the United Auto Workers union after bargainers took a rest break following about 36 hours of non-stop negotiations.
The two sides are attempting to hammer out a new contract for 7,200 UAW members at five plants in Detroit, Three Rivers, Mich., and Buffalo, N.Y. A strike would force General Motors Corp., to suspend production at its 11 North American light truck assembly plants within days, and cause more supplier headaches for Ford Motor Co..
Company and union officials began talking about 6 a.m. Friday and recessed talks around the dinnertime Saturday night. UAW leaders let a strike deadline expire midnight Friday without any picketing action. No new deadline was set.
"The mood is still good. Progress is being made," said a person close to the talks who did not want his name used.
A union spokesman could not be reached for comment. UAW members have continued to report for work and the company's normal weekend operations of limited production and maintenance have gone on uninterrupted.
American Axle, which was spun off from GM in 1994, supplies rear axles for GM's pickup trucks and sport utility vehicles, axles for the Camero and Firebird rear-drive cars, as well as various parts for other passenger car lines.
The company makes axle shafts that Ford uses in its F-150 pickup trucks, Expedition and Explorer sport/utilities and some rear-drive passenger cars. It also makes axles for a small number of Chrysler Corp. light truck products.
Tight inventories among axle suppliers means GM's light truck plants would run out of parts about two days after a strike begins, analysts said. A shutdown of light truck operations could cost GM $20 million a day in lost profits, analysts said.
The American Axle talks have drawn attention because they mark the first time a GM spin-off has had to negotiate a new contract. The UAW is trying to force the company to adopt the same pattern contract the Big Three automakers agreed to for about 400,000 UAW members last fall.
Automakers guaranteed jobs for 95 percent of their current workforce in a contract that provides $2,000 lump sum payments in the first year and wage hikes of three percent in the second and third years. The pact allows automakers to pay new hires at 70 percent of the starting base hourly wage of about $19.
The company claims the Big Three pattern would put it at a severe cost disadvantage with its competitors.
A UAW strike against Johnson Controls Inc., a key seat supplier for Ford, reached its 20th day Sunday with no settlement.
contract talks resumed sunday between american axle amp manufacturing inc and the united auto workers union after bargainers took a rest break following about 36 hours of non stop negotiations the two sides are attempting to hammer out a new contract for 7 200 uaw members at five plants in detroit three rivers mich and buffalo n y a strike would force general motors corp to suspend production at its 11 north american light truck assembly plants within days and cause more supplier headaches for ford motor co company and union officials began talking about 6 a m friday and recessed talks around the dinnertime saturday night uaw leaders let a strike deadline expire midnight friday without any picketing action no new deadline was set the mood is still good progress is being made said a person close to the talks who did not want his name used a union spokesman could not be reached for comment uaw members have continued to report for work and the company s normal weekend operations of limited production and maintenance have gone on uninterrupted american axle which was spun off from gm in 1994 supplies rear axles for gm s pickup trucks and sport utility vehicles axles for the camero and firebird rear drive cars as well as various parts for other passenger car lines the company makes axle shafts that ford uses in its f 150 pickup trucks expedition and explorer sport utilities and some rear drive passenger cars it also makes axles for a small number of chrysler corp light truck products tight inventories among axle suppliers means gm s light truck plants would run out of parts about two days after a strike begins analysts said a shutdown of light truck operations could cost gm 20 million a day in lost profits analysts said the american axle talks have drawn attention because they mark the first time a gm spin off has had to negotiate a new contract the uaw is trying to force the company to adopt the same pattern contract the big three automakers agreed to for about 400 000 uaw members last fall automakers guaranteed jobs for 95 percent of their current workforce in a contract that provides 2 000 lump sum payments in the first year and wage hikes of three percent in the second and third years the pact allows automakers to pay new hires at 70 percent of the starting base hourly wage of about 19 the company claims the big three pattern would put it at a severe cost disadvantage with its competitors a uaw strike against johnson controls inc a key seat supplier for ford reached its 20th day sunday with no settlement